Volkswagen has signed a Memorandum of Understanding with the government of Ethiopia to “collaborate and deliver a joint vision for the development of an automotive industry in the country”, including the possible establishment of a vehicle assembly facility.

Ethiopia is the third country (after Ghana and Nigeria) in Sub-Saharan Africa to sign an MoU with the Wolfsburg-based firm in the past six months.

The documents were signed by Thomas Schaefer, head of the Volkswagen Sub-Sahara Africa region, and Abebe Abebayehu, commissioner of the Ethiopian Investment Commission, in the presence of the Ethiopian minister for finance and economic cooperation, Ahmed Shide, as well as president of the federal republic of Germany, Frank-Walter Steinmeier.

VW says the signing of the MoU paves the way for Volkswagen and the Ethiopian government to commence a “high-level and technical collaboration which is integral to the development of an automotive industry and policy framework”.

The MoU lists four pillars crucial to the development of the Ethiopian automotive industry: the establishment of a vehicle assembly facility, the localisation of automotive components, the introduction of mobility concepts (such as app-based car sharing and ride hailing) and the opening of a local skills development training centre.

“Our Sub-Sahara Africa strategy is gaining momentum with the signing of the third MoU in the last six months. We are grateful for the support and vision of the Ethiopian government in identifying the automotive sector as one of the key manufacturing industries that can help the country to realise its Vision 2025 goals,” said Schaefer.

“As one of the fastest growing economies, and with the second highest population in the continent, Ethiopia is an ideal country to advance our Sub-Sahara Africa development strategy. Additionally, Volkswagen intends on tapping into existing expertise and strategic resources in Ethiopia to establish a thriving automotive components industry,” he added.

Volkswagen has been manufacturing cars in South Africa since 1951, and also has vehicle assembly plants in Algeria, Kenya and Rwanda.