Volkswagen is set to install assembly plant in Ethiopia

Volkswagen is set to install assembly plant in Ethiopia


Volkswagen known internationally as the Volkswagen Group, is a German multinationalautomotive manufacturing company headquartered in Wolfsburg, Germany. Volkswagen was founded in 1937, to manufacture the car which would become known as the Beetle.

In the early 1930s, the German auto industry was still largely composed of luxury models, and the average German could rarely afford anything more than a motorcycle. As a result, only one German out of 50 owned a car. Seeking a potential new market, some car makers began independent “people’s car” projects – the Mercedes, Adler Auto Bahn, Steyr 55 and Hanomag, among others.

The company designs, manufactures and distributes passenger and commercial vehicles, motorcycles, engines, and turbo machinery and offers related services including financing, leasing and fleet management.


VolkswagenGroup has maintained the largest market share in Europe for over two decades.The company ranked sixth in the 2017 Fortune Global 500 list of the world’s largest companies.

The company’s production grew rapidly in the 1950s and 1960s, and in 1965 it acquired Auto Union, which subsequently produced the first post-war Audi models. Volkswagen launched a new generation of front-wheel drive vehicles in the 1970s, including the Passat, Polo and Golf; the latter became its bestseller.

In 2016, it was the world’s largest automaker by sales, overtaking Toyota and keeping this title in 2017, selling 10.7 million vehicles. Volkswagen Group sells passenger cars under the AudiBentleyBugattiLamborghiniPorsche and Volkswagenmarques.

VW also has two major joint-ventures in China (FAW-Volkswagen and SAIC Volkswagen). The company’s operations in China have grown rapidly in the past decades with the country becoming its largest market. In June 2018, Volkswagen Trucks and Buses which comprise the MAN, Scania, and RIO truck brands are renamed to TRATON AG.

Besides, it has been traded in the United States via American depositary receipts since 1988, currently on the OTC Marketplace. Volkswagen delisted from the London Stock Exchange in 2013.


Volkswagen Headquarter, Wolfsburg, Germany

At the present time, the company has operations approximately in 150 countries and operates more than 100 production facilities across 27 countries.

Ethiopia has experienced rapid economic growth since 2005 with real Gross Domestic Products (GDP) growth rate of 10.5 percent per annum compared to 5 percent for Sub-Saharan Africa between 2005 to 2017.

The country has huge potential in various investment areas including in manufacturing, agriculture and service sectors. Manufacturing is the engine of economic growth and structural transformation. Ethiopia is one of the few African countries that have formulated and implemented a full-fledgedindustrial development strategy since early 2000s. The growth of the manufacturing sector within industry is essential to build national technological capacity, industrial capability, technology progress, productivity and capital accumulation.

Nowadays,companies from European countries, Middle East, North America, Asia and African countries have been working mostly in the area of manufacturing sector.

Consequently, “Volkswagen will start assembling cars in Ethiopia in the near future,” said Gerd Muller, German Development Cooperation Minister, who is in Addis Ababa since last week. He made the statement this afternoon at the meeting with Ethiopia’s Minister of Finance and Economic Cooperation Dr. Abraham Tekeste.

Thus, MoU was signed by Dr. Abraham Tekeste and Dr. Muller to collaborate on multiple areas. The cooperation focuses on capacity development for Ethiopia’s effort of industrialization, including strengthening engineering technology applicable in multiple sectors, ranging from agriculture to manufacturing industries.

The government of German has been one of the major development partners of Ethiopia, especially in capacity building education through its different development agencies GIZ, which used to be called GTZ, among others.

Minister Gerd Muller has also indicated that Deutsche Telecom of Germany is interested to purchase shares in Ehio Telecom, which is the largest subscriber in Africa.

By: Mekonnen Hailu

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