Hyundai and Daewoo in Tanzanian Market
In a significant development, the IPP Group of Tanzania has formalized an agreement with Youngsan Glonet Corporation of Korea through a Memorandum of Understanding (MoU). The collaboration is poised to establish a state-of-the-art assembly plant in Tanzania for commercial and non-commercial vehicles.
IPP Automobile Limited, a subsidiary of IPP Group, envisions the assembly plant as a hub equipped with cutting-edge machinery to manufacture various high-quality vehicles, including commercial and construction lorries, buses, and sports utility vehicles (SUVs).
Key Highlights of the Partnership
The MoU inked on November 20, 2018, signifies a groundbreaking venture between Mr. Reginald Mengi, the executive chairman of IPP Group, and Mr. Thomas Choi of Youngsan Glonet. The assembly plant is strategically designed to produce 1,000 vehicles annually, introducing the first batch of new vehicles branded as Hyundai and Daewoo to the market by September 2019.
Diversification and Economic Impact
IPP Automobile Limited’s assembly plant is anticipated to cater to the local demand for vehicles and aims to export vehicles to neighboring countries, contributing to regional economic development. By minimizing exchange risks associated with vehicle imports, the project aligns with economic objectives and bolsters the automotive sector in Tanzania.
Job Creation and Local Empowerment
Reginald Mengi highlighted the substantial impact of the project on employment, emphasizing that the assembly plant would directly employ a minimum of 500 Tanzanians.
Moreover, indirect employment opportunities are expected to surpass 1,000 people. This move is significant for a region where heavy import duties are imposed on all vehicles, signaling a shift towards local production.
Export Prospects and Market Accessibility
With the assembly plant’s capacity to produce vehicles meeting international quality standards, the initiative is poised to enhance Tanzania’s standing in the automotive industry. The venture also strategically positions the country to become a regional exporter of vehicles, fostering economic ties with neighboring nations.
Timeline and Implementation
The first vehicles manufactured at the assembly plant are scheduled to be available for purchase in September 2019. This marks a pivotal moment in the Tanzanian automotive landscape, transitioning from being entirely import-dependent to fostering local manufacturing capabilities.
Original Article:https://www.tanzaniainvest.com/industry/assembly-plant-vehicles
