The entry of German automobile guru, Volkswagen and the unveilingof its maiden locally assembled car, is a major step towards making Kigali, a brand cosmopolitan. Multi-national brands are like birds of the same feathers; they like to flock together. When an industrial ace like Volkswagen enters a new market, it’s always likely to be followed in tow, by their main partners that support the business operations chain. As the media limelight was fully focused on Volkswagen’s shiny toys, fresh off the assembly line, little attention was paid to Compagnie Francaise de l’Afrique Occidentale (CFAO) a multi-billion-dollar French multi-national specializing in the goods distribution business. CFAO, which was founded in 1887 as a small trading enterprise dealing in groundnuts, leather, soap and rubber, has since expanded its portfolio which now, among others, operates a multi-brand car dealership with a major presence in Francophone Africa. For instance, CFAO has maintained a presence in Gabon, Cameroon, Togo and DRC since the 1920s and 30s, giving it unrivaled experience in the African trading terrain. But in 1990, the luxury goods and sportswear group PPR which owns among other brand, Gucci and Puma, purchased CFAO, shortly after it begun distributing pharmaceutical products. In a 2009 IPO, PPR, which has since rebranded itself to Kering, sold 50.39 percent of CFAO shares and collected US$1.2billion according to Reuters, in a deal that was coordinated by a consortium of bankers including BNP Paribus and Goldman Sachs. Three years later, in 2012, Kering sold an extra 29.8 percent of CFAO shares to Toyota Tsusho Corporation with the aim of cutting debt and funding the expansion of its luxury goods and sportswear business, but Toyota’s aim was to acquire full-ownership. Four years later, in 2016, the Japanese guru put in an offer for full acquisition, a quest that was realized in December that year, with Toyota acquiring all remaining shares of CFAO and proceeded to delisting it to become a privately-owned affiliate. Today, CFAO employs over 10,000 people globally; as of 2012, its total assets were estimated at1.19billion euros with a gross annual sales-revenue of 3.58billion euros. Its entry into Rwanda alongside Volkswagen should be seen as a double score of two international brands which will significantly boost the size of Rwanda’s private sector. Apparently, CFAO has registered a Rwanda subsidiary, separate from its branch in Kenya where it manages distribution of Volkswagen’s other assembly plant there. This has positive implications on both Rwanda’s job creation efforts as well as widening the country’s tax-revenue base. In Rwanda, CFAO’s business, reporters were told during the plant’s launch press-conference, will be to manage the shipping of car-parts used to assemble the vehicles, sales and distribution as well as dealing VW back-up products. Rwanda’s political stability founded on good-governance in the post-1994 Genocide against the Tutsi, security, a steadfast economy, impressive strides in technology, and decent physical infrastructure have, in recent years made the country, an attractive piece of African diamond. But it is fair to add that, those factors have been enhanced by the leadership brand personality of President Paul Kagame whose international salesmanship has significantly boosted Rwanda’s image abroad, as a viable destination for investment. He {Kagame} has been out there; speaking to investors, not in the politician’s but the CEO language and the results are seen in the continued arrival of respected multi-nationals such as Volkswagen, a trend hitherto, visible in the country’s hospitality sector. The country’s hotel sub-sector is home to several 5-Star American headquartered brands including Maryland’s Marriott, Minnesota’sRadisson Blu and the soon-to-come, New York based Sheraton without forgetting the region’s own, Serena, which pioneered the luxury hotel industry. Strictly based on its ownership, one is tempted to predict Toyota’s own entry into Rwanda’s now semi-virgin auto-mobile industry, building on the market intelligence and experience its affiliate CFAO is about to gain, as a result of its work, distributing Volkswagen’s products. While I am a loyal German-automobile patron, it is fair to concede that Toyota is the undisputed King of African roads. You might remember their braggadocio brand-campaign tagline in the 90s, that claimed ‘the car in-front of you is always a Toyota.” While true in most of Africa, it’s not quite the case in Kigali where the Mercedes-Benz is an increasingly common sight. But Toyota has always edged German autos on price-affordability, fuel efficiency, cheap and readily available spare-parts factors that have driven its sales and resale success in Sub-Sahara Africa, topping charts for the last three years in a row. While German-made car models are known for their road-safety, cutting edge designs, comfort, speed and luxury, they have the negative perception as being expensive to buy and maintain as well as being fuel-guzzlers, compared to most Japanese makes. So, while most of the country is upbeat about Volkswagen’s entry, the cost of its products dominated public debate on social media, with majority of commentators joining into the popular ‘sport of jumping to conclusions’ about the auto-makers success in Rwanda. But one thing is for sure, for many of us who can’t afford to own a brand-new Passat, we shall at least, certainly afford to rent it! Welcome to Rwanda, Volkswagen, and CFAO. Email: kenagutamba@gmail.com The views expressed in this article are of the author.
