If anyone was looking to question the growth of the African auto market and industry; take a deep breath and absorb some of the numbers, recognising this could pose a serious challenge to the industry in South Africa.
Recent data from the Central Agency for Public Mobilization and Statistics (CAPMAS) reveals a notable surge in Egypt's passenger car imports, indicating a burgeoning automotive market. In December 2023, the value of imported passenger cars soared to $214,8-million, showing a significant rise from the previous year's figure of $160,7-million.
Similarly, November 2023 witnessed a substantial growth in car imports, with figures reaching $223,4-million compared to $107,3-million in the corresponding month of 2022. The surge, totalling $116,9-million, underscores a robust demand for passenger vehicles in the Egyptian market.
However, despite these positive developments, the period from January to September 2023 witnessed a decline in total car imports, with the value dropping to around $1,3-billion from $1,5-billion in the same period of 2022. This decline suggests fluctuations in Egypt's automotive trade dynamics.
Shifting focus to Nigeria, the country experienced a remarkable increase in used vehicle imports, signifying a dynamic automotive landscape. The National Bureau of Statistics (NBS) reported a significant surge in the total value of used vehicle imports, soaring from N325,05-billion in 2022 to N1,063-trillion in 2023, marking a staggering 226,46% increase within a year.
Notably, between 2022 and 2023, the value of used vehicle imports in Nigeria jumped by N736-billion, according to the NBS foreign trade report for 2023.
The substantial rise recorded in 2023 can be attributed to a surge in vehicle imports, particularly in the second quarter, amounting to N733,91-billion, which represents about 69% of the total imports for the year. However, fluctuations were observed throughout the year, with varying figures in different quarters.
Despite these impressive figures, challenges persist in Nigeria's automotive sector. While the country has seen increased local production of automobiles, particularly from companies like Innoson and Nord motors, the elevated cost of production limits local demand, with patronage mostly from government and institutions.
Additionally, the importation of used vehicles from the United States, Qatar, and Europe remains a popular choice among Nigerians due to affordability. However, high import duties and currency depreciation pose barriers to accessibility for the average Nigerian.
In response to these challenges, the Nigerian government is considering a ban on the importation of used vehicles manufactured between 2000 and 2007, aiming to stimulate local production and bolster the domestic automotive industry.
Meanwhile, in Ghana, Honda Manufacturing Ghana (HMG) celebrated the commencement of automobile production at its Tema plant, marking a significant milestone in the country's automotive sector. With an initial annual capacity of 500 units, HMG's entry into the market reflects West Africa's growing potential as a hub for automotive manufacturing and trade.
Similarly, South Africa's automotive industry remains a crucial contributor to the national economy, accounting for nearly 5% of the GDP. The government's recent adoption of electric vehicle (EV) technology production signals a strategic shift towards sustainable mobility solutions.
Measures outlined in the annual Budget Speech, including investment allowances for new EV investments, underscore a commitment to fostering innovation and competitiveness in the automotive sector.
While these initiatives present promising opportunities for the automotive industry across Africa, collaboration between governments, industry stakeholders, and investors will be essential to address challenges and realize the full potential of the continent's burgeoning automotive market.
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