Volkswagen has signed a memorandum of understanding (MoU) with the government of Ethiopia to deliver a joint vision for the development of an automotive industry in the East African country.

The MoU was signed by Volkswagen sub-Saharan Africa region head Thomas Schaefer and Ethiopian Investment Commission (EIC) commissioner Abebe Abebayehu. 

The MoU identifies four pillars to enable the development of the Ethiopian automotive industry, namely the establishment of a vehicle assembly facility; localisation of automotive components; introduction of mobility concepts, such as app-based car sharing and ride hailing, as well as the opening of a local skills development training centre.

Ethiopia is the third country in sub-Saharan Africa to sign an MoU with Volkswagen in the last six months, after Ghana and Nigeria penned agreements with the German car maker in August last year.

In Ghana, Volkswagen has undertaken to establish a vehicle assembly facility and conduct a feasibility study for an integrated mobility solutions concept.

In Nigeria, Volkswagen is investigating implementing a phased approach in the assembly of vehicles, initially from assembly kits, with the long term view of establishing Nigeria as a West African assembly hub.

“Our sub-Sahara Africa strategy is gaining momentum with the signing of the third MoU in the last six months,” notes Schaefer.

“We are grateful for the support and vision of the Ethiopian government in identifying the automotive sector as one of the key manufacturing industries that can help the country to realise its Vision 2025 goals.

“As one of the fastest growing economies, and with the second highest population on the continent, Ethiopia is an ideal country to advance our sub-Saharan Africa development strategy. Additionally, Volkswagen intends on tapping into existing expertise and strategic resources in Ethiopia to establish a thriving automotive components industry.”

“Ethiopia is in a remarkable economic, political and social transformation that puts inclusive, sustainable growth and private sector development at its heart,” adds Abebayehu.

“This MoU signing with Volkswagen is yet another testimony that Ethiopia is open for business. Through this partnership, we hope to advance a joint vision for the development of a competitive, vertically integrated and sustainable automotive industry.”

Volkswagen has been manufacturing vehicles in South Africa since 1951. On the African continent, the company also currently has vehicle assembly operations in Algeria, Kenya and Rwanda.

Under its Transform 2025+ brand strategy, Volkswagen is strengthening its regional operations and focusing on new up-and-coming markets, such as Africa.