Volkswagen chooses Egypt over Nigeria for auto assembly plant

 In a new strategic cooperation agreement, Volkswagen Group Africa and the Egyptian government have signed an agreement to build and operate a new Body Shop and Assembly plant in the East Port Said Automotive Zone (EPAZ). 

This decision marks a significant shift from initial plans that had positioned Nigeria as a potential site for the automaker’s assembly plant. 

The agreement between Volkswagen and Egypt underscored the commitment of the government to bolster its automotive industry. 

In June 2022, the government of Egypt announced the introduction of the Automotive Industry Development Programme, which aims to foster the local value addition, increase vehicle production volume, boost and attract investment, and improve emission standards in the automotive sector.” 

The Egyptian government aims to establish a special-purpose vehicle to build the buildings for the body shop and assembly line. 

VWA has expressed interest in using these facilities to assemble vehicles for the Egyptian market, following the positive completion of the feasibility study. 

“The new strategic cooperation agreement with the government of Egypt offers VWA an asset-light investment model, which shifts the investment focus from capital expenditure to operational expenditure,” says VWA MD Martina Biene.