FRANKFURT Dec 22 Volkswagen plans
to start a ride-hailing service in Rwanda in a sign of how the
German carmaker is developing pay-per-use transportation models
in new markets where rival Uber has not yet gained
Emerging markets with poor transportation links have become
a key battleground for establishing new mobility services, with
Uber competing with newer rivals like Ola, backed by Japan's
Softbank, and China's Didi Chuxing.
Volkswagen, which is developing electric vehicles and new
services as it tries to put its diesel emissions scandal behind
it, said on Thursday said it had signed a memorandum of
understanding in Kigali, the Rwandan capital.
"Volkswagen wants to strengthen its presence in emerging
markets. That is why Africa ranks high on our agenda," said
Volkswagen brand chief Herbert Diess.
Rwanda is seen as a good market because competition is less
intense. Uber operates in several African countries, including
Kenya where it launched in early 2015 and now faces local
Volkswagen expanded into ride-hailing in May, when the
German carmaker invested $300 million in Gett, a firm which
seeks to outmanoeuvre Uber by refusing to apply "surge" pricing
at peak traffic times.
Volkswagen said it had also agreed to set up a vehicle
production facility in Rwanda, deepening its local manufacturing
operation in Africa where it expects vehicle sales to grow by 40
percent within the next five years.
Volkswagen did not say which models it would make in Rwanda
but said it would explore using electric versions of the Golf in
the local mobility services business.
Volkswagen has been producing cars in Africa since 1951,
when it started making the VW Beetle in South Africa.
VW this week said it would start making the Polo Vivo in
Thika, Kenya. VW will also produce the VW Golf as well as
several models from Seat, Skoda in Algeria from 2017 onwards.
(Reporting by Edward Taylor; Editing by Keith Weir)