Volkswagen reopens plant in Nigeria

Article by Andrew Christian, on July 13, 2015

After 25 years, production has resumed at Volkswagen Group’s plant in Nigeria. The automaker is making this move as part of a plan to boost sales growth in Africa. In a statement, VW's manufacturing partner Stallion Group said that its Lagos plant restarted operations last Tuesday. Among the models that will be rolled out from this plant are the Amarok pickup truck and the Passat, Jetta and CC sedans.

VW gave confirmation that production has begun but it didn’t give details about specific volumes. Nigeria is the most populous country in Africa with around 170 million people. It also has the biggest economy in the continent. It has become apparent that Nigeria is a key growth driver for the whole of Africa.

International automakers have been venturing outside of the conventional auto markets in order to take advantage of tax breaks and to avoid paying import taxes. Having an increase in sales of these countries will help offset the impact of the slowdown in China and the declines in Russia and Brazil. Just last month, French automaker PSA/Peugeot-Citroen announced that it will be investing in Africa by putting up a factory in Morocco.

The Peugeot 301 sedan is being assembled in Nigeria in small volumes at a plant that PAN Nigeria runs. It was in 1975 that VW began building the Beetle in Lagos via a partnership. Other car models and light commercial vehicles were added later on. But then, operations were terminated in 1990 because of sluggish demand and problems with quality.

Back then, the Lagos plant was acquired by Dubai-based company Stallion, the official distributor of VW, Audi, Skoda and Porsche brands in Nigeria.

Stallion also produces vehicles in the country for Nissan Motor Co., Hyundai Motor Co., Ashok Leyland Ltd. and CNH Industrial NV's Iveco truck division. VW Group has other production facilities in this continent. One factory builds the Polo subcompact while its Scania and MAN vehicles are built by three truck or bus factories.

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