Africa Automotive: Morocco usurps South Africa as leading auto hub

In the realm of motoring manufacturing in Africa, Morocco has emerged as a surprising leader, outpacing traditional powerhouse South Africa. With a strategic geographical positioning, favourable economic policies, robust infrastructure, a skilled workforce and competitive production costs, Morocco has become the continent's auto hub.

Morocco's advantageous positioning on the world map, nestled at the junction where Europe, Africa and the Middle East converge, naturally bestows upon it an unparalleled edge in market accessibility. This prime location not only facilitates the seamless movement of goods across borders but also significantly reduces transportation costs and timeframes.

Automakers, in pursuit of establishing a global footprint, find Morocco's proximity to European markets particularly appealing, as it enables them to cater to a diverse customer base with heightened efficiency. The nation’s strategic placement is not merely a geographical boon but a gateway that opens up a spectrum of opportunities for the auto industry to thrive.

By capitalising on this unique advantage, Morocco has adeptly positioned itself as a central hub in the automotive sector, offering access to a vast array of markets. This strategic geographical positioning is a cornerstone of Morocco's ascendancy in becoming the pre-eminent auto manufacturing hub on the African continent, underscoring its significance in the global automotive landscape.

Favorable Economic Policies and Investment Incentives

The Moroccan government has been astutely aware of the potential economic uplift that the automotive sector could usher into the nation. In a strategic move to harness this potential, an array of favourable economic policies and enticing investment incentives have been put in place.

These policies are not just superficial lures but are deeply entrenched frameworks designed to cultivate a thriving automotive manufacturing ecosystem. Tax exemptions, significant subsidies, and a streamlined bureaucratic process offer a fertile ground for foreign automakers to plant their roots without the customary fiscal burdens or red tape that can stifle growth and innovation.

Furthermore, these incentives are tailored to bolster long-term investments and collaborations, positioning Morocco not just as a manufacturing base but as a partner in automotive excellence. This proactive approach by the Moroccan government has been pivotal in transforming the national landscape into an attractive haven for automotive giants, fostering an environment where the auto industry can flourish unencumbered by the usual constraints faced in other regions.

Robust Infrastructure and Logistics Network

Morocco's standing as a beacon of automotive manufacturing efficiency is markedly reinforced by its state-of-the-art infrastructure and comprehensive logistics network. The country is equipped with cutting-edge ports, which are amongst the most modern in Africa, ensuring that both the import of raw materials and the export of finished automobiles are conducted with the utmost efficiency.

Its railways and roadways, developed with precision engineering, span the length and breadth of the nation, facilitating an unimpeded flow of goods within Morocco and beyond its borders. This intricate network of transport modalities is pivotal in ensuring that production lines are never halted due to logistical setbacks, thereby enabling automakers to adhere to stringent delivery schedules.

Beyond mere transportation, the logistical prowess of Morocco extends into the realm of supply chain management. With advanced systems in place, the tracking, handling, and distribution of automotive components are executed with laser precision, thereby minimising wastage and optimising resource allocation.

This robust infrastructure and logistics framework not only underpins the operational excellence of Morocco's automotive sector but also serves as a magnet for global automakers in search of reliability and efficiency in their manufacturing processes. It's this seamless integration of infrastructure and logistics that fortifies Morocco’s position as a formidable contender in the global automotive arena, setting a benchmark for others to follow.

Skilled Workforce and Training Programs

A pivotal element in Morocco's rise as the automotive hub of Africa is its investment in cultivating a skilled workforce, underpinned by an emphasis on specialised training programmes.

The nation has strategically developed a network of vocational training centres and partnerships with global automotive companies, aimed at equipping its labour force with the necessary expertise to meet the demanding standards of the industry.

Renault's Tangier plant.

These programmes are not only tailored to the intricacies of automobile manufacturing but are also designed to be dynamic, evolving in tandem with the latest advancements in automotive technology and processes. As a result, Morocco boasts a pool of highly skilled technicians, engineers and workers who bring a blend of technical acumen and practical experience to the production lines.

This commitment to workforce development ensures that the country's automotive sector is powered by individuals who are not just proficient in their roles but are also innovators capable of driving efficiency and excellence. The strategic foresight in fostering such a skilled workforce serves as a linchpin in Morocco's automotive industry, enabling it to not only compete but also set new standards on the global stage.

Competitive Production Costs and Quality Standards

In the landscape of global automobile manufacturing, Morocco distinguishes itself not only through its strategic initiatives but also via its competitive edge in production costs and adherence to high-quality standards. The convergence of lower labour expenses, advantageous energy rates and reduced operating costs positions

Morocco as an appealing hub for automakers aiming to enhance their operational efficiency. This financial attractiveness is complemented by a steadfast commitment to quality. Moroccan production facilities are governed by stringent quality control measures, ensuring that each vehicle not only aligns with but often surpasses international quality benchmarks.

This meticulous attention to cost-efficiency coupled with quality excellence underscores Morocco’s capability to produce vehicles that stand up to global scrutiny, thereby cementing its status as a formidable player in the automotive domain. The synthesis of cost competitiveness and quality assurance is pivotal in Morocco’s ascension as the automotive leader in Africa, showcasing a model of manufacturing excellence that resonates on a worldwide scale.

Images: supplied (Cover image Ulli/Pixabay)

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Africa Automotive: Algeria geared to go

Algeria is ready and geared to host the next Intra Africa Trade Fair, having been party to the signing of the agreement to stage the 2025 event that will a pivotal step in furthering the African Free Trade Agreement and bolstering inter-communication and cooperation within the auto industry across Africa.

In collaboration with the African Export-Import Bank (Afreximbank), the African Union, and the AfCFTA Secretariat, the Hosting Agreement for the upcoming Intra-African Trade Fair 2025 (IATF2025) was signed to set the stage for the fourth edition of the Intra-African Trade Fair, scheduled to be held in Algiers from September 4 to September 10, 2025.

Seated from (left to right): Chiza Charles Chiumya, representing Ambassador Albert Muchanga, Commissioner for Trade and Industry African Union Commission, Kanayo Awani, Executive Vice President, Intra-African Trade Bank – Afreximbank, H.E. Tayeb Zitouni, Minister of Trade and Export Promotion, Algeria, and Chawki Jaballi, Representing H.E. Wamkele Mene, Secretary General AfCFTA Secretariat. Standing from left to right: HE Chief Olusegun Obasanjo, Chairperson of the IATF2025 Advisory Council and Former President of the Federal Republic of Nigeria and HE Nadir Larbaoui, Prime Minister of Algeria.

During the ceremony, attended by dignitaries including HE Chief Olusegun Obasanjo, Chairperson of the IATF2025 Advisory Council, and Kanayo Awani, Executive Vice President of Afreximbank, the importance of the fair in promoting trade and investment within Africa was underscored. Chief Olusegun Obasanjo emphasized the transformative impact of the fair, highlighting its role as a catalyst for economic growth and continental integration.

Kanayo Awani echoed this sentiment, stating the IATF has become a vital platform for realising the vision of the AfCFTA, facilitating trade deals and fostering business connections that benefit economies across the continent and expressed gratitude to the Government of Algeria for their steadfast support.

Representatives from the AfCFTA Secretariat and the African Union emphasized the strategic significance of the IATF in addressing trade challenges and promoting intra-African commerce. They highlighted the fair as a symbol of unity and opportunity, aimed at breaking down barriers and driving economic development.

In his closing remarks, Jean-Louis Ekra commended the collaborative efforts driving the fair's success, emphasizing the power of collective action in advancing trade and investment in Africa.

The ceremony, attended by a diverse array of stakeholders including public and private sector representatives, diplomatic corps, and industry associations, served to raise awareness about the upcoming IATF2025. Attendees also had the opportunity to visit the venue for the fair, the Algerian Company of Fairs and Exports (SAFEX).

The Intra-African Trade Fair stands as the continent's premier trade and investment event, offering exhibitors a platform to showcase their products and services, engage in business exchanges, and establish valuable connections. With its focus on fostering collaboration and innovation, the fair plays a pivotal role in driving economic growth and prosperity across Africa.

The success of previous editions, such as the third edition held in Cairo in 2023, underscores the growing importance of the IATF in promoting intra-African trade and investment. With each iteration, the fair continues to expand its reach and impact, solidifying its position as a cornerstone of Africa's economic development agenda.

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Africa Automotive: Snoozing is losing

As Africa forges ahead in expanding its automotive horizons by embracing new energy technology and welcomes investments in manufacturing and allied industries, South Africa is in danger of falling behind despite the announcements made in the recent Budget Speech to facilitate automakers updating factory facilities to manufacture electric vehicles.

In the midst of a tumultuous election year in which the ruling ANC could well find itself unseated after 30 years of governance in favour of a Democratic Alliance-led coalition government, long-term important decisions regarding the future of the auto industry could find themselves even lower down on the ‘to do’ list.

Ongoing problems with the state energy suppliers, Eskom, mean the country is still subjected to regular stage electricity cuts and this is doing little to excite ordinary car buyers to consider making the move to electric vehicles (BEV). Equally, the high price of BEV with no mention by Government of any incentives or considerations to help persuade people to make the switch, is not making this a speedy process.

BEV manufacture in the country would, in the medium-term, be almost exclusively for export to feed European and American markets, with the manufacture of combustion engine and hybrid vehicles continuing for the local and many of the African markets.

However, competition is hotting up and Morocco has initiated its first-ever industrial zone focused on the production of electric vehicle batteries, with a substantial investment of USD 2,3-billion. This 283-hectare zone is poised to generate 4 000 new jobs and has already attracted attention from international investors, including the Chinese company CNGR and the Moroccan investment fund Al Mada.

It is absolutely vital South Africa has its own battery manufacturing facility that will feed local automakers as well as being price competitive on the global stage.

During COP28 in Dubai, world leaders in climate policy gathered to assess the progress of nations in reducing emissions and to bolster their commitment to climate goals. A major topic of discussion was the equitable and swift shift from fossil fuels, a subject met with both hope and caution.

The transformation of transportation systems is crucial in the move away from fossil fuels. To maintain the global temperature increase within 1,5 degrees Celsius, it’s necessary for two-thirds of passenger travel to be free of fossil fuels by 2030, to boost electric vehicle (EV) sales to 75% of the global market, and to encourage more active and public transportation usage.

African nations, despite their low greenhouse gas emissions, experience significant adverse effects from climate change. Rapid urbanisation in Africa, coupled with limited economic and institutional resources, exacerbates these challenges. African cities are grappling with issues such as declining air quality, which is responsible for more than 383 000 deaths annually on the continent, as well as flooding, extreme temperatures and water shortages.

Inaction is not an option for Africa, despite the imbalance between their contributions to and the impacts of climate change. African governments at all levels must seize the opportunity presented by the continent’s population growth and emerging markets to overhaul their transportation systems and enhance the resilience of their communities.

The urgency for Africa to act is clear. Delaying the transition to electric vehicles risks prolonging the Global South’s reliance on fossil fuels, potentially trapping these countries in a cycle of dependency.

The continent stands at a crossroads, with the chance to lead by example in the global shift towards sustainable transportation.

The World Resources Institute’s latest State of Climate Action report casts a sombre tone, yet electric vehicles (EVs) emerge as a hopeful segment. Presently, the global adoption of EVs in the passenger car market is on a trajectory that aligns with the 2030 electrification goals. This surge is primarily driven by large markets, notably China, where the combined registrations for EVs and internal combustion engine vehicles reach about 20-million annually.

Africa, while currently home to less than 1% of the global EV count, is poised for significant automotive expansion. This is attributed to its status as the second most populous and fastest-growing continent, coupled with the lowest rate of vehicle ownership. This presents a substantial opportunity for the electrification of road transport throughout Africa.

In recent years, African nations have recognized the benefits of vehicle electrification, such as enhanced urban air quality, decreased dependence on imported fuels, bolstered local car production, and progress towards climate mitigation objectives.

Countries across sub-Saharan Africa, including Rwanda, Ghana, Zambia, Kenya, Cape Verde, and Zimbabwe, have been proactive in setting targets to increase EV shares in vehicle registrations and are crafting comprehensive electric mobility policies, along with specific regulations and incentives.

This shift in policy reflects a commitment by African nations to move away from fossil fuels. The rise of start-ups aiming to electrify commonly used vehicles in African urban centres, such as minibuses and two- and three-wheeled motorcycles, is a testament to this commitment.

These types of vehicles are particularly prevalent in the informal public transport networks of East and West Africa. For instance, in Kenya, two and three-wheelers represent a significant portion of the annual vehicle registrations, exceeding 65%. This trend underscores the continent’s potential to revolutionize its transportation landscape through electrification.

Kenya’s electric vehicle (EV) landscape is seeing a surge in two-wheeler EVs, which now make up 70% of the country’s total EVs. In regions where two and three-wheelers are less common, public transportation is becoming a key driver for electrification.

Cities such as Durban and Cape Town in South Africa, Dakar in Senegal, Abidjan in Côte d’Ivoire, and Nairobi in Kenya are either operating electric buses or have plans to introduce them.

The growth of local electric mobility startups in Africa and the adoption of innovative business models are pivotal for the continent’s EV market. Research indicates that once EV sales hit 1% of total vehicle sales, a rapid increase in adoption is likely to occur.

However, many African countries have yet to reach this benchmark. For instance, Kenya’s EV registrations from May 2018 to May 2023 are estimated to be under 3 000, which is a fraction of the 400 000 vehicles registered each year.

To align with environmental and developmental objectives, African nations need to implement strategies that boost EV adoption to surpass this critical threshold. African EV firms are exploring strategies to price EVs competitively against internal combustion engine vehicles. Urban economies in Africa are fostering EV accessibility through creative approaches such as battery swapping, pay-per-use systems, and leasing options.

Nonetheless, meeting the demand for EVs in Africa remains a challenge. Despite the emergence of local electric mobility startups, the demand outpaces the supply, with companies such as BasiGo and Roam experiencing waitlists for their electric buses.

As a primary importer of EVs, Africa is poised to leverage its unique assets, including rich mineral resources essential for battery production, renewable energy prospects, and a young, expanding workforce, to strengthen its position in the global EV market.

Looking ahead, it is essential to explore various strategies to enhance the electric vehicle (EV) lifecycle, from production to end-of-life processes, through a multifaceted approach encompassing policy, technology, and economics.

Nissan Motor has announced its intention to debut its e-power hybrid technology vehicle in Tunisia as part of a broader strategy to gauge the demand for EVs within the African market.

Despite these challenges, Sherief Eldesouky, Nissan Africa’s Managing Director, remains optimistic.

“Electrification might take some time in Africa but we have a plan on how to introduce electrification, especially with our e-Power technology in some of the markets that are ready for this technology in Africa,” he says.

Nissan has already launched this technology in Morocco with the Qashqai and in Egypt with the X-Trail, with plans to expand to Tunisia.

Eldesouky added: “We’ve been leveraging our technology because Africa is not ready in terms of infrastructure availability of electricity.”

Elsewhere, Chinese automaker, Geely, plans to invest $200-million in a vehicle assembly plant in Algeria. The factory will have a production capacity of 50 000 vehicles per year. The first model to come out in 2026 will be the GX3.

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Colin-on-Cars - Nissan taps into Africa

Nissan Africa has revised its management structure to strengthen its foray into the African auto market.

“These are clear signals of the importance of Africa to Nissan globally through this new increased focus on the continent” says Joni Paiva who was newly appointed as Africa President. Paiva will also continue his current position as Divisional Vice President, overseeing Sales and Marketing, India.

Sherief Eldessouky has been appointed Managing Director of Nissan Africa with effect from April 1, 2023, replacing Mike Whitfield, who will now become the Group Strategic Advisor for Policies, Political Affairs and External Relations.

Sherief Eldessouky

“I am thrilled about this opportunity, I have been given,” says Whitfield who established Nissan Africa as a regional business unit in 2020 “Africa is a key market with an unmatched growth potential and the way we unlock that will be through a combination of intelligent mobility solutions and creating a coalition of willing countries to develop a thriving and sustainable automotive manufacturing industry.

Mike Whitfield

Eldessouky, who previously combined the twin roles of being Nissan Egypt country director and driving the transformation of Nissan Africa, has spent his life in the automotive industry in a career that has taken him from his native Egypt to Brazil, China, Korea, the United States and Uzbekistan, among others.

He joined Nissan in 2020 as head of the OEM’s automotive manufacturing operation in Egypt and was appointed country director at the end of that year.

“Nissan is well positioned on the continent, with an incredible legacy,” says Eldessouky, our job as a management team has been to establish just how we bring more wealth and value to a region with promising automotive growth opportunities with its rate of 42 vehicles per 1 000 compared to the global average of 182.”

Joni Paiva

“I am confident that with the team we have in Africa and the support that we get from our Nissan colleagues in the rest of the world, that we will achieve this.”

The position of country director Nissan Egypt will be filled by Mohamed Samad, who will return to Cairo from Japan where he has been based. Kabelo Rabotho remains country director for Nissan South Africa.

Maciej Klenkiewicz, currently Managing Director RBU Central Eastern Europe (CEE) will expand current scope to include Independent Markets Africa, making the most of his previous ASEAN importer management experience replacing Hide Kuwayama who is assuming a new position in Nissan’s global headquarters.

“These are exciting times for Nissan Africa,” says Paiva. “We have a very strong management team in place to drive the medium-term plan of ‘Let’s Build’ and to deliver the mobility solutions that Africa needs.”

The appointment are the latest iterations in a raft of changes and consolidations, which have seen Nissan Africa take responsibility for the North African territories of Algeria, Morocco and Tunisia last year.

Visitors and delegates to the Africa Automotive Show and the Intra Africa Trade Fair in Abidjan in November will be able to hear about the full spectrum of growth within Africa of the auto industry, both in terms of sales and manufacturing or assembly.

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