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Uganda will invest $40m in the first phase of a $263m vehicle-assembly plant with the view of starting production by mid-2021 to tap rising demand in the East African Community region.
Construction of the facility started in February, Isaac Paul Musasizi, the chief executive officer of state-owned Kiira Motors’ said in an interview in the capital, Kampala. Annual output is initially envisaged at 5 000 vehicles and will reach 150 000 units with the assembly of buses, trucks, pick-ups and sports utility vehicles, he said.
Kiira Motors has so far produced two car prototypes and a solar-powered bus.
“We shall start making our vehicles, but also have room for others to assemble,” Musasizi said.
The regional EAC offers a lucrative opportunity because at least 85% of its vehicle imports are used models, he said. The combined market for passenger and commercial vehicles in its five member nations - Uganda, Kenya, Tanzania, Rwanda and Burundi - could double in the next 13 years to almost 630 000 annually, according to a study by Uganda’s Ministry of Science, Technology and Innovation, which holds a 96% stake in Kiira Motors.
Kenya and Rwanda are already investing in vehicle-assembly industries to exploit opportunities in the region that has some of the continent’s fastest growing economies.
Kiira Motors plans to produce sedans on a small scale and is in talks with prospective partners for provision of technology, to take an equity stake or undertake joint ventures, the CEO said.
“We are talking to the big fish in the automotive industry,” he said. “We have reached out to players across the globe.”
