The German truck manufacturer Volvo Group is set to open its third assembly plant in Africa in the port city of Mombasa in Kenya. Its other assembly plants in Africa are in South Africa and Morocco, where the company has over 20% and 18% market share respectively. Setting up the Mombasa plant will cost Volvo about Ksh. 2.5 billion ($24,201,375) and it is aimed at strategically targeting the growing East African regional market.
The Volvo Trucks President, Claes Nilsson, said the plant should be up and running in the Q1 of 2018 with an output of 500 units per year. Nilsson further added that Volvo would be bringing the top of the class modern trucks with specifications tailor-made for the East African region.
“We see great opportunities and believe that this part of Africa that has potential to grow substantially; it has a lot of different resources due to the diverse production of different products and natural resources,” said Nilsson while addressing the Capital FM Business.
“Business conditions here is that you have to have a manufacturing plant unless you do that, you are not a serious player in this market.”
The setting up of the assembly plant will be done through a partnership with NECST Motors, the current exclusive importers of Volvo trucks into the Eastern Africa regional market.
300 Jobs to be created directly by the plant’s establishments
The planned investment and setting up of the Volvo truck assembly plant is said to create about 300 jobs directly on top of other indirect employment opportunities. The company is also targeting to capture at least 20% of the market within the next 3-5 years.
“We have been in East Africa for the last three decades and believe that there is a significant potential for the premium truck business as regional economies grow, infrastructure investments expand, and the business environment remains investment friendly,” Nilsson adds.
“The willingness and desire by the government to invest in infrastructure is necessary to use our products that are premium and heavy duty used for transportation.”
The company’s regional office is based in the capital Nairobi and is responsible for expanding the Volvo brand footprint across the East African region.
In 2016, Volvo sold 103,000 trucks across 128 different countries recording a turnover of over Ksh. 3.6 trillion.