Volvo Trucks have announced its plans of setting up an assembly plant in Mombasa.
The company’s president, Claes Nilsson, made the announcement adding that the plant will be launched in the first quarter of 2018.
It will be the third assembly plant in Africa with others in South Africa and Morroco.
Nilsson says the firm will bring to the market top modern trucks that are designed specifically for east Africa. He also said the plant will be targeting an output of 500 units per year.
“We see great opportunities and believe that this part of Africa that has potential to grow substantially; it has a lot of different resources due to the diverse production of different products and natural resources.”
“Business conditions here is that you have to have a manufacturing plant, unless you do that, you are not a serious player in this market.”
The move comes even as French car manufacturer Peugeot promised to return to Kenya and is set to assemble 5 of its models in the country beginning this June. Volkswagen also resumed production of cars in Thika after a four-decade pause in production.
The Volvo Trucks assembly plant will be done through a partnership with NECST Motors who are the exclusive importers of the trucks in East Africa. It is slated to create approximately 300 direct jobs in addition to other indirect employment opportunities.
“We have been in East Africa for the last three decades and believe that there is a significant potential for the premium truck business as regional economies grow, infrastructure investments expand and the business environment remains investment friendly,” Nilsson said.
A Volvo Trucks regional office has been opened in Nairobi and will be responsible for expanding the footprint of the brand in East Africa.
“The willingness and desire by the government to invest in infrastructure is necessary to use our products that are premium and heavy duty used for transportation,” he noted.
The firm is eyeing a 20 percent market share in the next three to five years. It has over 20 percent market share in Morroco and 18 percent market share in South Africa. Overall, the firm has about 15 plants worldwide.
In 2016, the firm sold 103, 000 trucks in 128 different countries with the turnover hitting about Sh3.6 trillion.