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VW to launch turn in Rwanda hailed as part of the expansion in Africa.
By Aaron Maasho and Clément Uwiringiyimana NAIROBI KIGALI.
NAIROBI KIGALI Volkswagen is to start producing cars in Kenya and Rwanda and start a tour hailing Service Kigali that the German automaker is developing pay-per-use transport business models in markets where rival Uber n ' has not gained ground.
Emerging markets with poor transport links have become a key battleground for the creation of new mobility services, with Uber compete with newer rivals like Ola, supported by Japan's Softbank 9984 T, and China Didi Chuxing.
Volkswagen, which is developing electric vehicles and new services as it tries to put the scandal behind diesel emissions, said on Thursday it had signed a memorandum of understanding in Kigali, the Rwandan capital.
Volkswagen wants to strengthen its presence in emerging markets, which is why Africa ranks high on our agenda, said the head of the Volkswagen brand Herbert Diess.
Rwanda is considered a good market because competition is less intense Uber operates in several African countries, including Kenya where he launched in early 2015 and is now facing the local rivalry.
Volkswagen expanded race hailing-May, it invested 300 million Gett, a company that seeks to thwart the plans Uber refusing to apply advanced pricing rush hour traffic.
The German company also said it would consider the use of electric versions of the VW Golf in the Rwandan mobility services sector.
Volkswagen said it had also agreed to set up a vehicle production facility in Rwanda, deepening its local manufacturing operations in Africa where it plans to increase its vehicle sales by 40 percent over the next five years.
Volkswagen did not elaborate on the targeted production volumes or mention which models would be built locally.
There will be an investigation phase which runs from January to April and May until we have the final business model together and if everything looks good we will go ahead and we'll see the first cars being assembled by the end of the year, VW's South Africa Managing Director Thomas Schaefer said in a news conference in Kigali on Wednesday.
Volkswagen produces cars in Africa since 1951, when he started making the VW Beetle in South Africa.
VW this week said it would start making the Polo Vivo in Thika, the reopening of a car assembly plant in Kenya after a gap of four years.
The German automaker assembled cars in Kenya in the 1960s and 1970s and now will join a number of competitors that already have local assembly operations, including Isuzu T 7202, T 7203 Toyota, Nissan and Mitsubishi 7201 7211 T T.
The automotive market in Kenya is currently dominated by used cheap imports from countries such as Japan It gathers most trucks, pick-ups and buses kits supplied by foreign manufacturers.
The assembly plant will begin by VW Vivo model and extend to a range of vehicles, with the first car should be produced before the end of the year, officials said.
VW will also produce the VW Golf, as well as several models of Seat, Skoda in Algeria from 2017, the company said.
Additional reporting by Edward Taylor; Editing by Keith Weir Greg Mahlich.
VW to launch turn in Rwanda hailed as part of the Reuters Africa expansion, launch tower, Hailing, Rwanda.