FILE PHOTO: A Volkswagen logo is pictured during the Volkswagen Group's annual general meeting in Berlin
JOHANNESBURG - VW South Africa, which will start rolling out its mobility solutions in Rwanda next month, was involved in intensive discussions with Ghana and Ethiopia about establishing a car industry in those two countries.

Thomas Schaefer, the chairperson and managing director of Volkswagen Group South Africa, which is responsible for the sub-Saharan Africa region, described Ghana and Ethiopia as “very interesting countries” from a car industry perspective, but there were many other African countries he was talking to about changing the status quo.

But Schaefer said Ghana was spoilt at the moment with extremely cheap imported eight-year-old vehicles from the US. “They are 10 years old and they look like they have been through hell, but you can buy them for $500 or $1000. A new car can’t compete with this,” he said.

Schaefer emphasised the need for African countries that wanted a car industry to start with a good policy, with new cars that were built in that country becoming the used cars of tomorrow. It was not about cutting poor people off from being able to obtain a cheap car, he said.

Schaefer said he was convinced that “Africa’s time is now” and referred to how everybody laughed at Volkswagen when, 30 years ago, it was the first automotive company to enter the Chinese market. He said 44 African countries had this year signed an agreement establishing a free trade area, and although it would not happen “tomorrow”, he believed it would happen a lot faster than the 30 years it took to establish the EU free trade area.

Schaefer said Volkswagen arrived in Rwanda because the government was keen to change the situation in that country.

He was looking for countries that wanted to industrialise and were prepared to change their car policy to stop used vehicle imports. Rwanda was the first country to do this and wanted jobs for their people, wanted to grow their economy and “be a trendsetter in this”.

“Everybody is, of course, dreaming of a 1-million car factory somewhere. It’s not going to happen overnight. It needs good policy and strong support to get it industrialised. But a country like Ethiopia is definitely good for its own auto industry. They are twice the size of South Africa. They could easily have an auto industry of 1-million cars (a year),” he said.

Schaefer said the same applied to Nigeria, because the oil price had gone beyond $78 (R981) a barrel, which was usually the time that Nigeria woke up, because it was highly dependent on crude oil.

Volkswagen reported in January this year that it had established a new company in Rwanda and planned to spend about $20million in the first phase on the roll-out of its integrated automotive mobility solutions strategy for that country, a worldwide first for the German-based vehicle manufacturing group.

- BUSINESS REPORT