Motor dealer DT Dobie is set to start assembling Volkswagen (VW) vehicles including saloon cars and light trucks at the Thika-based Kenya Vehicle Manufacturers plant.
The company, which took over the VW franchise from CMC Holdings, has been importing the German vehicles fully built from markets like South Africa.
Volkswagen South Africa CEO Thomas Schafer said the German multinational will later this year start assembling some of its models at KVM, having stopped local assembly in the 1970s.
“We were in Kenya in the 1960s and 70’s and resuming operations here is part of our Africa strategy,” Mr Schafer said in a statement. “The Volkswagen Group is excited to be here and we will start operations immediately.” Mr Schafer signed an agreement with President Uhuru Kenyatta to launch VW’s local assembly at KVM where the government has a 35 per cent stake.
DT Dobie is a 32.5 per cent shareholder of the Thika assembly plant while CMC Holdings’ stake stands at 32.5 per cent.
Among the VW models to be assembled are light trucks and Vivo, a passenger car which will be the first to be put together locally. “I am happy to welcome back the Volkswagen Group, currently the largest car manufacturer in the world, back to Kenya,” Mr Kenyatta said in a statement.
The German automaker used to operate in Kenya until 1977.
It used to assemble Volkswagen vans, microbuses and the famous Kombi. Local assembly is largely boosted by the exemption of vehicle parts headed for assembly plants from the 25 per cent import duty levied on fully-built cars, resulting in a price advantage.
Dealers say the recent move by the government to scrap a 20 per cent excise tax on locally assembled vehicles could see an increase in local production.
Kenya, however, still trails major markets like South Africa that has developed a vibrant automotive manufacturing industry on a raft of incentives and a large internal demand for new vehicles.
