NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Wednesday, July 8, 2015

VOLKSWAGEN AG resumed building vehicles in Nigeria for the first time in 25 years in a bid to foster sales growth in Africa.

Assembly began Tuesday in Lagos of models that will include the Passat, Jetta and CC sedans as well as the Amarok pickup truck, manufacturing partner Stallion Group said Tuesday in a statement.

Germany-based VW, Europe’s biggest carmaker, confirmed the start of production without specifying planned volumes.

Global automakers have been expanding manufacturing outside traditional car markets to benefit from tax breaks and avoid import duties. Additional sales in those countries would also cushion the effects of slowing growth in China and contractions in Brazil and Russia.

Africa has some of the lowest rates of car ownership – Kenya has just 9 cars for every 1,000 people, Nigeria has 13, Cote d’Ivoire 16, Zimbabwe 45, and South Africa 103. By contrast there’s nearly 500 cars for every 1,000 people in Europe.