Volkswagen explores Egypt as production hub

German carmaker Volkswagen AG is reportedly planning to set up a factory in Egypt to expand its presence in the African continent as demand slows in Europe.

“We are very interested in Egypt as a production hub,” Volkswagen Group Africa’s managing director, Martina Biene, told Bloomberg.

The factory announcement is expected to be made soon, the report said.

The carmaker plans to begin with an assembly unit using existing facilities in Egypt, moving to build a full-scale factory later, Biene said.

Qatar Holding is the third-largest shareholder in Volkswagen after paying “in excess of” €7 billion to acquire 10 percent of Volkswagen Group – including 17 percent voting rights – plus 10 percent of Porsche in 2009.

The company currently operates a manufacturing plant in South Africa and assembly facilities in Ghana, Rwanda and Kenya.

Volkswagen is expecting to open five new production facilities across Africa over the next 15 years, the report said.

• EU clears €4bn funding to support Egypt’s economy
• Bolstering Egypt’s trade with Africa
• UAE and Egypt could benefit most from global trade shift

The devaluation of the Egyptian pound in March 2024 made Egypt a more attractive proposition both as a consumer market and as a base from which to export.

In January China’s Geely Auto opened its first car assembly plant near Cairo to produce 10,000 vehicles per year for the domestic market and up to 30,000 for export.

The Egyptian government has announced support for the growth of local manufacturers of automobile parts at a cost of $1.4 billion and has signed agreements with three global manufacturers to deliver an average of 60,000 to 70,000 cars per year.