Volkswagen has signed an agreement with the Kenyan government to start building the Polo Vivo at a facility in Thika, near Nairobi, by the end of this year. The plant is operated by Kenya Vehicle Manufacturers (KVM), which assembles buses, trucks and passenger vehicles under contract for a range of OEMs, including Nissan, Hyundai and MAN. KVM was the first company to assemble vehicles in Kenya.
VW is investing in jigs and fixtures in the plant but did not reveal an investment figure. The carmaker said it expected annual capacity for its product to hit 5,000 next year.
The vehicles will be built from complete-knockdown (CKD) kits imported from VW South Africa’s Uitenhage plant, which makes Polo Vivo, and VW is working with Kenyan importer DT Dobie.
“We will obviously start small and then grow our investments as the market grows,” said a spokesperson for VW South Africa (VWSA). “There is a cross shareholding between DT Dobie and KVM hence it makes sense to use this existing facility.”
The kits will be moved by shortsea from the port of Port Elizabeth to Mombasa port in Kenya from where they are being taken by road to the Thika plant. A rail link is currently under construction and once complete, by June 2017 at the latest, the containerised CKD kits will switch to that mode for the hinterland journey, which is roughly 530km.
Volkswagen Transport is currently looking at the best options for the short-sea and road movements and no final decision has yet been made on the providers according to VWSA’s spokesperson.
Enormous potential in Kenya"We are taking the successful Polo Vivo from South Africa to Kenya to leverage the enormous growth potential of the African automobile market and participate in its positive development,” said Thomas Schäfer, managing director of VWSA, at a signing ceremony in Nairobi last week (pictured). “This compact model is the best-selling car in the Sub-Saharan region – so it is the ideal entry model for the promising Kenyan market. With this move, we are strengthening the brand's overall position in Africa and taking an important step towards expanding our commitment in the region," Schäfer continued.
When assembly starts in Kenya it will be the seventh facility making VW Group products in Africa. Along with the Uitenhage assembly plant VW has three other production facilities in South Africa: the Pinetown plant produces MAN trucks and bus chassis; the Olifantsfontain plant produces MAN buses; and VW’s Johannesburg plant produces Scania trucks and buses. It also has a production facility in Nigeria which opened in July last year and a venture with Stallion Group at its plant near Lagos. Stallion is VW’s preferred partner for distribution in Nigeria and handles VW Group brands, as well as Audi, Skoda and Porsche
In Kenya VW said it was also planning to set up a local training centre to qualify production workers and provide further training. The centre will initially focus on the needs of the Volkswagen production team but later on the company said it would provide basic training for young people to learn general industrial skills with the aim of increasing employment opportunities in the region in general.