German carmaker Volkswagen has announced a $20M investment in a local assembly plant and mobility solution expected to begin production in the second quarter of this year.

The firm has since set up and registered a local company, Volkswagen Mobility Solutions Rwanda, with lawyer Athanase Rutabingwa as the resident Director.

Thomas Schafer, the Chief Executive of Volkswagen South Africa, said that  the first phase of their entry into the local economy would see the firm invest about $20M.

The investment will largely go into setting up an assembly and retail plant, training and rolling out a mobile solutions platform.

The first car from the local plant is expected between around end of April or early May, this year according to the Managing Director.

The local assembly plant to be located in the Special Economic Zone will have a production capacity of 5000 cars and is set to create employment of between 500 to 1000 Rwandans in the first phase.

"Already, some equipment to be used in the assembly plant are on their way to the port of Mombasa as we  move to commence operations as soon as possible,” Schafer said.

The plant will initially focus on producing three models, Teramont, Jetta and Polo hatchback but could consider more models in coming days.

Volkswagen also plans to  roll out a mobile solutions which involves  community sharing of cars, ride hailing application which is expected to commence later this year with a total of 300 cars.

The cars to be used in the solution will all be produced in the country.

To roll out the service, the firm is partnering with a local tech firm Awesomity Lab which will tailor make solutions for the local market.

Without disclosing the expected returns from the investment, the firm says that they are upbeat about growth in the Rwandan market adding that they are in the country with long term ambitions.

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