By David Himbara
It is over a year since VW launched what General Paul Kagame claimed to be an assembly plant from which German cars would soon roll off in thousands. Rwandans would no longer buy cheap used cars — said Kagame. Reuters just assessed the progress of VW in Rwanda and highlights bad news.
First, VW in Rwanda is basically a “Move” ride-service with only around 2,200 active users. Second, forget the purchase of new cars in Rwanda — few, if any Rwandan can afford VW cars. As Reuters says:
”Low purchasing power and a lack of financing put them out of the reach of most Africans, while competition from used imports gave buyers a cheaper alternative.”
To make its cars affordable in Rwanda, VW will sell used cars instead, after using the vehicles for its ride service. Reuters explains:
”All those vehicles are owned by VW, which after a year or two of service will sell them onto the second-hand market at a price more accessible to average Rwandans.”
Kagame forgot that the median monthly income in urban Rwanda is RWF50,000 which is equivalent to US$54 or US$1.80 a day. That is below the international poverty line of US$1.90 a day. With that kind of poverty, only a few Rwandans can buy used cars, let alone new VW cars.
