Egypt Daily News – Volkswagen AG is exploring the possibility of producing vehicles in Egypt, as part of a broader strategy to expand its presence in African markets amid declining demand in Europe.
“We are very interested in Egypt as a production hub, and we hope to announce a business plan soon,” said Martina Biene, Managing Director of Volkswagen Group Africa, in an interview. The initial step could involve setting up an assembly operation using existing local infrastructure. This may eventually lead to the construction of a full-scale manufacturing plant in Egypt, the most populous country in the Middle East.
The move comes as Volkswagen scales back production and trims its workforce in Germany, responding to rising costs, sluggish European demand, and growing competition from more affordable Chinese automakers. The company’s premium brands, Audi and Porsche, are also undergoing workforce reductions to curb expenses.
Egypt is actively seeking foreign investment to revitalize its economy following a severe two-year financial crisis. The government views the automotive sector as a potential growth engine, estimating domestic demand to exceed $8 billion annually over the next decade. Egypt’s sizable market and strategic location near the Middle East and other African nations enhance its appeal as a production base.
Biene noted that this approach differs from Volkswagen’s strategy in Morocco, currently Africa’s top passenger car producer and largest vehicle exporter, where operations are heavily export-oriented toward Europe. “We’re not looking to expand plants aimed at European exports right now, especially after recently closing facilities there,” she said.
Volkswagen, which aims to cut German production by more than 700,000 units and eliminate 35,000 jobs by 2030, has historically faced challenges in competing with more cost-efficient rivals like Toyota and Hyundai in markets such as Africa, India, and Southeast Asia.
Currently, the company operates a full-scale plant in South Africa and assembly sites in Ghana, Rwanda, and Kenya. It plans to expand its African footprint to as many as five production hubs within the next 10 to 15 years. Each facility would focus on different models tailored for export across the continent.
