In a move to expand its regional footprint, Dongfeng, a prominent Chinese motor company, is contemplating the establishment of a car assembling plant in Rwanda.
The prospect was revealed by John Mugabo, Managing Director of Choice Africa Investments, a member of Carcarbaba, the official dealer of Dongfeng in Rwanda.
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"If the demand for our cars increases to 200 and 300 units per year, the assembly plant will be brought to Rwanda,” he said, noting that currently the company is approaching the 200-unit mark.
Dongfeng boasts a diverse range of vehicles, including trucks, SUVs, construction vehicles, military vehicles, and more.
It stands as one of China&039;s largest automobile groups with a comprehensive business portfolio covering commercial vehicles, passenger vehicles, auto assemblies, parts and components, machinery, and related products and services.
Explaining the rationale behind considering Rwanda for the assembling plant, Mugabo highlighted the favourable business conditions in the country.
"Everything is organised, and there is no corruption. We target the East African region, with Rwanda as the hub for automobile manufacturing and expand to neighbouring countries such as the Democratic Republic of Congo and Burundi,” he said.
"We want to provide good products, good quality, and good prices,” he added.
Rwanda is continuing to grow in terms of attracting Foreign Direct Investment (FDI).
According to the Foreign Private Capital (FPC) census report of 2022, the country attracted $399.3 million in 2021, marking a substantial 45.7 per cent increase compared to the $274.1 million registered in 2020.
The remarkable growth in FDI can be attributed to favourable investment conditions and the utilisation of both debt and equity instruments, resulting in an 8.5 per cent surge in FDI stocks, which reached $2.9 billion.
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The report also highlighted that Rwanda’s return on investment (ROI) increased to 11.8 per cent in 2021 from 9.7 per cent in 2020, positioning it well above the global average despite the impact of the pandemic.
If Dongfeng’s plant materialises, it will not be the first in Rwanda, since German car maker Volkswagen began assembling electric cars in 2017 in the country.
Dongfeng Motor Corporation achieved sales of 2.92 million vehicles in 2022, ranking among the top three in China’s automotive industry and 188th in the Fortune Global 500. Their products are sold in over 100 countries worldwide.