(Bloomberg) -- Volkswagen plans to start assembling cars in Nigeria as early as next year with Dubai-based conglomerate Stallion Group, according to people familiar with the matter.
PSA/Peugeot-Citroen and Nissan both build cars in Nigeria. Nissan partners with Stallion while PSA builds the Peugeot 301 sedan in small volumes at a plant operated by PAN Nigeria.
Nigeria is Africa’s most populous nation with about 170 million people and has the continent's largest economy. The country is emerging as a key growth driver for the entire continent.
VW has approved the project for small-scale final assembly because of tax rules that encourage local manufacturing, said the people, who asked not to be named before an official announcement.
A VW spokesman declined to comment. Stallion Group didn't respond to messages seeking comment.
Assembly in Nigeria would mark Volkswagen's first production on the continent outside South Africa. VW's only other African manufacturing facilities comprise a car factory in Uitenhage, outside Port Elizabeth, where it produces the Polo small car, while the MAN commercial-vehicle unit has production locations in Olifantsfontain, near Johannesburg, and Pinetown, outside Durban.
VW operates 107 factories globally.
Automotive News Europe contributed to this report