How fast is Africa’s car manufacturing industry growing?
How fast is Africa’s car manufacturing industry growing?
In 2020, over 600 vehicles were produced in Africa, with some 484,000 passenger cars produced on the continent, a decrease of around 39 percent compared with the previous year. South Africa produced 238, 000 cars, Morocco produced 221,000 cars and Egypt produced 23,000 cars. The two leading countries in passenger car production in 2020 were South Africa and Morocco.
The African automotive market was valued at USD 28.45 billion in 2020, and it is expected to reach USD 39.87 billion by 2026.
Africa’s automobile industry is revving up for growth as multinational car makers eye the continent’s untapped market to drive up sales and expand production. With the market registering a fresh wave of multimillion-dollar investments, the African Development Bank (AfDB) is helping to position the continent as a “final frontier” for global carmakers.
This comes as Morocco, bolstered by automakers like, Nissan and Peugeot as well as Chinese newcomer, BYD adopts a new strategic roadmap for 2021-2030. The roadmap is designed to boost the value of local sourcing to $2.9 billion by 2025. As part of the grand plan, the state wants to raise local integration by 80 percent, up from 65% during the forecast period.
Elsewhere, multinational carmakers are setting up new production plants in Angola, Ethiopia, Ghana, Kenya, Namibia, Nigeria, Rwanda and South Africa.
Increased activities began in November 2015, when executives from the world’s biggest car manufacturers embarked on a concerted effort to grow Africa’s auto industry.
Since then, the newly-created African Association of Automotive Manufacturers (AAAM) has been working with African governments to create a policy environment for the sector to flourish.
For a continent with well over 1bn inhabitants, Africa’s slice of just 1% of global new car sales – with 85% of those sold in South Africa – leaves plenty of room for growth. Particularly when continental spending power has risen at over 10% per annum for considerable periods since 2000.
Analysts predict that by 2030 over half a billion Africans will have joined the middle-class, fueling further demand for cars, including electric cars which have already gained entry into the market.
Given Nigeria’s road network, population and ability to pay, the West African state is considered to be the continent’s largest potential automotive market.
Morocco and South Africa are currently the largest vehicle manufacturers in Africa, with South Africa producing in excess of 600,000 units and Morocco churning out marginally under 400,000 units annually.
Other African countries are jumping into the fray in both car manufacturing and assembly. However, homegrown car manufacturers have also started sprouting up across the continent, including South Africa’s Birkin Cars, Nigeria’s Innoson Motors, Ghana’s Kantanka Cars, Uganda’s Kiira Motors, Morocco’s Laraki motors, Kenya's Mobius motors, and Tunisia's Wallyscar. Most of them looking to wrest market share from second-hand car importers.
