Africa Automotive: Volkswagen signs paintshop deal in Egypt

Keeping the shiny side up is a way of telling someone to drive safely but that shiny side is the result of technical and precisely calibrated set of steps as any vehicle makes it way through the manufacturer’s paint shop – and it has to last the lifetime of that vehicle.

As a step to upscaling the auto industry, Volkswagen has signed an agreement with the Government of Egypt to work together to develop a feasibility study on a shared automotive painting facility within the East Port Said Industrial Zone in the East Port Said Automotive Zone northeast of Cairo.

The agreement was signed by the Chairman of the General Authority for the Suez Canal Economic Zone, Waleid Gamal Eldien, Chief Executive Officer of the Sovereign Fund of Egypt, Ayman Soliman, Managing Director of the East Port-Said Development Company, Dr. Ahmed Fikry and Chairperson and Managing Director of Volkswagen Group South Africa (VWSA), Martina Biene in the presence of the Prime Minister of Egypt, Dr Mostafa Madbouly at the headquarters of Council of Ministers in the New Administrative Capital.

Standing: Dr Mostafa Madbouly, Prime Minister of Egypt and Dr Hala Al-Saeed, Minister of Planning and Economic Development
Signing (left to right): Martina Biene, Chairperson and Managing Director of Volkswagen Group South Africa (VWSA); Waleid Gamal Eldien, Chairman of the General Authority for the Suez Canal Economic Zone; Ayman Soliman, Chief Executive Officer of the Sovereign Fund of Egypt and Dr Ahmed Fikry, Managing Director of the East Port-Said Development Company

In June 2022 Egypt announced the Automotive Industry Development Programme (AIDP) that, like its counterpart in South Africa did, aims to foster the local value addition, increase vehicle production volume, boost and attract investment and improve emission standards in the automotive sector.

Biene commented: “Volkswagen is excited about the prospects of establishing its presence in the Egyptian market as part of its long term growth plans on the continent, especially in North Africa. The AIDP is one of the most progressive automotive programmes on the continent which Volkswagen intends to be part of. The signing of the  strategic co-operation agreement with the Government of Egypt is the continuation of Volkswagen’s strategy to play a pioneering and leading role in the development of the automotive industry in Africa. ”

Volkswagen has been manufacturing vehicles in South Africa for over 72 years. It has three other vehicle assembly facilities in Sub-Saharan Africa. The facilities are in Kenya, Rwanda and Ghana. In addition, Volkswagen has a presence in 17 countries in Sub-Saharan Africa where it sells passenger and commercial vehicles through licensed importers.

Colin Windell - proudly CHANGECARS

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Africa Automotive: Doing it for ourselves

CAIRO: The African automotive sector is surging ahead with new projects and new plans for both assembly and the manufacture of parts to feed what is hoped will become a voracious beast – provided even more cooperation and support can be gained from governments across the continent.

Steady progress towards realising an African Free Trade Agreement (AfCFTA) is being made with countries such as Nigeria, Ghana, Kenya, Morocco and Egypt fully committed to making it work while, simultaneously, energising their own auto programmes.

The President of the African Association of Automotive Manufacturers (AAAM) and Managing Director of Volkswagen South Africa, Martina Biene, said at the opening of the Africa Automotive Show in Cairo: “There are multiple opportunities for everyone in Africa to be a part of the combined value chain.

Martina Biene

“A comprehensive automotive policy creates the framework for trade and will build new car demand but remains dependent on economies of scale and any policy framework must serve to increase that demand.”

Presenting the results of a ‘roadmap’ study done in Egypt on powertrain evolution, Dylan Jessup, Automotive Sector Incentives Manager at EY South Africa, said battery electric vehicles (BEV) was “not the panacea” and that each segment in the possible alternative power source options needed to be evaluated separately and specifically for each country to “determine economic, environmental and social benefits”.

“South Africa’s auto industry is very built on a trade based policy but we need to look at regional integration and establish a healthy supply chain (that could involve beneficiating the raw materials mined in various countries rather than sending them away only to be re-imported).

“Each country needs to look at it strengths and work on those and the actual implementation of the AfCFTA will then make trade easier.”

Of the issues demanding urgent attention is the one on fuel quality with much of Africa still running Euro II specification whereas Europe is moving to Euro VII.

Rynhardt Rall, Regional Product Manager for Nissan pointed out the automaker had two plants in Africa – South Africa and Egypt – saying: “It is very expensive to run internal combustion engine (ICE) vehicles on Euro VII fuel but Africa does not need to go head-to-head or play catchup.

“Africa is rich in natural resources so it makes good sense to utilise that,” he says.

Biene concurred and added the low level fuel meant Volkswagen could not introduce some of its latest generation hybrid vehicles that simply could not run on Euro II fuel.

“The South African government has to become more pro-active on this issue.”

The Intra Africa Trade Fair (IATF) is a massive multi-cultural event covering many aspects of trade and industry and, while a large and very significant element, the Auto Show is just a part of an entity where deals worth billions of Dollars are being done by Africans for Africans.

In a keynote speech read on his behalf, Morocco’s King Mohammed VI said: “Africa needs now more than ever bold, innovative initiatives to encourage private entrepreneurship and unleash the full potential of our continent.

“Over the past two decades, Morocco has made infrastructure development a priority in all economic sectors and is pushing toward its goal of deriving more than 52% of its national electricity mix from renewable energy by 2030.”

The King also stressed African countries should enhance “coordination and cooperation mechanisms to drive regional integration”,  citing the Morocco-Nigeria Gas Pipeline Project he says will “enable all countries along the pipeline route to have access to reliable energy supplies and to be more resilient to exogenous energy price shocks”.

There is a slender thread that links all of the different activities and interests at IATF and literary superstar Chimamanda Ngozi Adichie and Narrative Landscape Press announced the launch of The CANEX Prize for Publishing in Africa.

Why does this matter?

“Stories can give us the confidence to own our aspirations,” says the writer. “CANEX is about hope – the hope of many more African stories. We need more African countries. Stories matter. Stories can take away dignity, but they can also restore dignity. Stories shape politics and perceptions.”

And that is the thread – reshaping politics and perception to benefit all Africans – and in his keynote address, Dr Akinwumi A Adesina, President of the African Development Bank Group, highlighted Africa’s prospects as a prime investment destination.

“The continent is not as risky as perceived, is growing and showing resilience despite global challenges. As investors, put your monies where the future is — the future is Africa.”

Part of the South Africa Pavilion at IATF

The President of Comoros, Azali Assoumani, pointed out manufactured African exports account for just 1% of world exports.

“We export them to developed countries and these countries re-export them to us processed and sell them back to us at ten times the price. Despite the obstacles, there are enormous opportunities for the development of value chains in Africa.”

Alec Erwin, former Minister of Trade and Industry now a driving force in the efforts of AAAM remarked the early 90’s in South Africa brought new challenges and the realisation the economy had to grow.

“Simply put, South Africa’s auto industry could not survive the way it was and that led to it changing to a volume production scenario which it managed very successfully. For Africa a similar system is needed that will let us all grow and, while there may be some policy differences, it will all be based on trade – and that is why AfCFTA is so vitally important.”

In a video address Anand Pather, Vice President Customer Services at Toyota South Africa, said: “Africa needs a comprehensive safety policy across the auto industry, something like the South African Bureau of Standards that will oversee all of the parts supply chain to ensure equal and high standards are maintained.”

If some of what AAAM and various African governments are talking about seems a bit ‘pie-in-the-sky’, think on this – the Start/Stop button so common in cars today started life as an Egyptian patent.

Colin Windell – proudly CHANGECARS

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Africa Automotive - All go for Cairo

As Egypt and, more specifically, Cairo gears up to host the Africa Automotive Show as part of the week-long Intra Africa Trade Fair, the country is also celebrating being ranked 28th in a global e-mobility index regarding the preparedness of the country is to transition to electric vehicles (EVs), and was categorized as a starter market after scoring 32 points out of 100.

Out of 35 countries studied in the new Global Electric Mobility Readiness Index (GEMRIX) 2023 by US consulting firm Arthur D Little, 13 countries from the MENA region were included, with Egypt ranked 10th in the Middle East.

“Despite the relatively low presence of EVs, the Egyptian government has been expressing strong ambitions to push for the promotion of EVs. A key reason for this ambition is the government’s commitment to achieving its sustainable development goals, which are elaborated in Egypt Vision 2030,” said the report – and this as South Africa still awaits clarity of the ANV Government as what it plans for the future.

According to the report, a starter market is one with a strong potential for new start-up-style entrants and early infrastructure development in a “blue ocean environment.”

It also noted that many of these markets would have some progress in establishing local EV manufacturers and an EV ecosystem.

In much the same time frame the Africa Association of Automotive Manufacturers (AAAM) announced Volkswagen’s Martina Biene is taking over the role of President from newly-named head of Stellantis South Africa, Mike Whitfield.

Martina Biene

Her goal – to play a “key role through AAAM to grow the automotive manufacturing industry from the 1,1-million vehicles a year today to 3,5-million or even 5-million by the year 2035”.

The AAAM was founded in November 2015 and is the only African entity with a focus on both widening and deepening the automotive industry across the continent by working with governments to develop investor-friendly policies as well as seeking to align a global stakeholder network, to free up Africa’s economic potential, via the automotive sector.

As the large South African of delegates and exhibitors heads for Cairo, it is with the hope the electric vehicle strategy for the country will have been outlined and, as Billy Tom, naamsa President and CEO of Isuzu Motors South Africa said recently: “As an industry reliant on exports to markets such as Europe, which has shifted away from ICE vehicles, we have to be able to adapt and meet these stringent demands to continue delivering vehicles there and to other similar markets.”

Colin Windell – proudly CHANGECARS

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Africa Automotive - Nissan announces new agreement as Africa ramps up

Automotive activity across Africa is ramping up at speed ahead of the Intra Africa Trade Fair being held in Cairo next month – the latest being the announcement Nissan’s long-standing Algerian partner, Groupe Hasnaoui, has signed a renewed distributor agreement extending its history with the Japanese OEM, which dates back to 1993.

Nissan Africa President Joni Paiva says: “It’s a momentous occasion for us, as we seek to unite the entire continent under one organisation for the first time in our global company’s 90-year history.

"This is part and parcel of our mid-term growth strategy, to unlock the potential that this continent has as the world’s last automotive frontier by providing the best line-up of models to answer Africa’s mobility needs in a sustainable, safe and aspirational way.”

Nissan Africa is the only OEM on the continent to have two fully owned plants, in Egypt and South Africa and two DKD facilities in Ghana and Nigeria.

“We are excited about this partnership,” adds Maciej Klenkiewicz, Nissan South Africa & Independent Markets Africa Country Director, “We have ambitious plans for the Algerian market and specifically with the locally built Nissan Navara.”

The North African markets of Algeria, Egypt and Libya have been identified as key markets for the new Navara, along with a range of exciting packages that will be introduced with the model across the continent, he said.

“SUV leadership also forms part of our product strategy in Africa; we have started introducing an exciting range of new models, such as the Magnite, Qashqai and X-Trail to the African continent.”

Paiva added: “We have a wonderful legacy in Africa, due in no small part to the vehicles we produce and the partnerships we have established and nurtured over the last 60 years in some cases. It is wonderful to have a partner such as Groupe Hasnaoui in a strategically important market such as Algeria.

“Together, we navigate challenges, embracing a vision for the future built on trust and shared values. This agreement symbolises our collective commitment to sustained growth and prosperity in the Algerian automotive landscape.”

Opening a business roadshow in Algeria recently, Ms Kanayo Awani, Executive Vice President, Intra-African Trade Bank, Afreximbank said: “It Is time for Africa to take her destiny in her own hands and to determine her own developmental agenda. However, doing so will not be easy. It will require commitment, courage, and deliberate action. Traders need to seek out new market opportunities rather than the conventional route of turning to markets abroad.”

She added the African Continental Free Trade Area “promises to revolutionise trade, reshape markets across the region, boost output in the manufacturing and service sectors, and fundamentally transform Africa’s economic structure.”

Speaking about the Intra-African Trade Fair, she said it was created “to deal with the challenges of lack of access to trade and market information” and she praised the Algerian Government for deciding to hold a Country Day at IATF2023 in Cairo, saying that “it gives me confidence that Algeria is poised to lead  the charge for African trade.”

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Africa Automotive - The clock is ticking

As the clock counts down to the Intra Africa Trade Fair (IATF) taking place in Cairo, Egypt in November, the pace of African automotive development is picking up pace. . .rapidly.  

In new recent developments, Chinese automaker BYD – which recently launched in South Africa – announced its launch plans in Morocco in an alliance with Auto Nejma, a key player in automobile distribution in Morocco.  

Still in Morocco – The Minister of Industry and Trade, Ryad Mezzour, and Frank Huber, Forvia Group’s Executive Vice-President of Seating, recently launched the construction of the group’s new production facility in Sale near Rabat.  

The new industrial plant, which will expand the Group's industrial activity in Morocco, will specialise in the cutting and production of textile and leather covers for automotiveseats, to meet the demand of numerous European automakers.  

The equipment manufacturer will invest $15,4-million in this industrial initiative, which will generate 1 400 new jobs.   

“This fourth Faurecia plant reinforces our positioning as a destination of choice for investment in the automotive sector. It is a clear sign of the confidence of renowned players in our industrial potential and assets,” Mezzour says, adding, “this project will bring an added value to the Rabat-Sale-Kenitra region, reinforcing its position as a benchmark industrial hub in the automotive industry.” 

“We've been present in Morocco for nearly fifteen years, and we're delighted to open a new chapter in this country, where we already employ nearly 4 000 people, by expanding our plant in Sale,” Hubert stated.   “Morocco has seen significant growth in the automotive sector in recent years. We are delighted to be strengthening our position in this ecosystem today, and would also like to thank the local authorities for their support from the outset of this project,” he added.  

Since 2008, Faurecia, a Forvia Group company and the world's 7th largest automotive technology company has had three production facilities in Morocco: two in Kenitra and one in Sale.  

Algerian Trade and Export Promotion Minister, Tayeb Zitouni, recently announced China has agreed to build an automobile factory in Algeria and Yazaki, a Japanese car parts supplier, has signed an agreement with the Governor of Fayoum in Egypt to allocate land for a new factory that will be constructed by the company's local subsidiary using $33,27-million in investments. 

Although South Africa remains the largest automobile manufacturing country in Africa, the gap is narrowing and particularly in the establishment of investment in the supply chain sector.  

A quick snapshot of some of the activity around Africa shows:  

Ghana: Kantanka Automobile Company: Founded by Kwadwo Safo Kantanka, this indigenous automaker has been producing vehicles since the early 1990s. Kantanka’s production facilities in Ghana assemble a range of vehicles, including sedans, SUVs, pickups, and luxury cars. The company focuses on designing and manufacturing vehicles that cater to the specific needs of the African market.

Nigeria: Innoson Vehicle Manufacturing (IVM): Innoson Vehicle Manufacturing (IVM), founded by Innocent Chukwuma, is a leading player in Nigeria’s automotive sector. IVM has established a modern production facility in the city of Nnewi, where it assembles a diverse range of vehicles, including cars, buses, and trucks.

Kenya: Mobius Motors: Mobius Motors, headquartered in Nairobi, is a notable example of Kenya’s commitment to producing vehicles that meet local transportation challenges. The company focuses on creating affordable and rugged vehicles designed for African road conditions and transportation needs. 

The African Automotive Show runs concurrently with IATF2023 from November 9 to November 15 and, based on figures from the last IATF, held in Durban, could generate more than R840-billion in trade deals.  

Besides the 1 600 exhibitors, 79 countries and 35 000 attendees that will be participating at the event, here are another nine reasons you need to register today.  

Automotive companies including commercial (bus and truck) and passenger vehicle manufacturers, assemblers, importers, component manufacturers, dealers, parts & accessories distributors, electric motorcycles and vehicles, infrastructural projects and agencies, other members of the value-chain, including mineral processing, logistic services providers and automotive development agencies will have an opportunity to showcase their products and also interact with potential buyers, suppliers and governments.

The Automotive Forum (conference), spearheaded by the African Association of Automotive Manufacturers (AAAM) addresses the most pertinent issues affecting Africa’s automotive growth. Highlights of the 3-day program include:

- Presentations from global automotive leaders, including multi-national OEMs

- Participation of several Heads of State

- An agenda that seeks to facilitate cooperation and the development of regional auto supply chains (trade between auto hubs) for auto manufacturing on the continent.

- Unprecedented networking with all of Africa’s key role-players and international partners.

A B2B and B2G platform: The platform will provide matchmaking and business exchange opportunities for vehicle manufacturers, vehicle assemblers, OEMs and component suppliers and other automotive industry service providers, leading to the conclusion of business and investment deals across various sectors.

This is supported by a dedicated African Buyers' Programme  Africa (excluding South Africa) currently accounts for only 0,5% of the global automotive market (600 000 units). Its motorisation rate is just 45 vehicles per 1 000 inhabitants - significantly below the global average of 203.   The exhibition will attract continental and global buyers and sellers, including executives and market expansion managers that will engage in business deals in, amongst others:

- Parts Manufacturing, including EV components, batteries and solar

- Raw Materials

- Parts Supply

- Parts Distribution

- Vehicle Manufacturing

- Component Manufacturers

- Vehicle Aftermarket Services

- Logistics Service Providers

- Infrastructural Projects e.g. Special Economic Zones

- Vehicle Accessories:

- Vehicle Electronics

- Vehicle Security

- Vehicle Maintenance

- Electric Vehicle Supply

- Electric Vehicle Accessories

- Vehicle Finance (Including Insurance)

  While challenges exist, the potential impact of a flourishing automotive sector is immense. The growth of the industry can drive economic development, create jobs, facilitate technology transfer and meet the unique transportation needs of African consumers.  

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Africa Automotive - Cairo is a go

The Automotive Expo and Forum is a go for 2023 at the Egypt International Convention Centre in Cairo – this follows a venue change from the original Abidjan site.

As part of the Intra Africa Trade Fair 2023, the Automotive Expo, hosted by the African Association of Automotive Manufacturers (AAAM) gains feature status this year within the fair that runs from November 9 to November 15.

Fully backed by the Department of Trade and Industry in South Africa, many local automakers and assemblers are expected to be visible in Cairo along with a strong showing from assemblers in other African countries such as Morocco.

Indeed, automotive interest and passion at all levels is becoming increasingly evident in the investment plans already in place, or being put into place, in various African countries and, perhaps, is highlighted by the news Kenya will be staging an auto show in September.

This will run from September 15 to September 17 at, the Sarit Centre Expo Hall in Nairobi and aims to attract new partners and players in the automotive and associated industries.

The Motorshow's theme this year is ‘The Connection,’ emphasising the seamless integration of automotive technology with our daily lives and the endless possibilities it brings.

The organisers expect 10 000 attendees and the title sponsor is NCBA Bank whose Group Managing Director, John Gachora, says: "As the leaders in asset financing in Kenya and East Africa, we are dedicated to creating sustainable transport options by providing affordable financing solutions."

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Africa Automotive: Talking parts in Nigeria

Approval by Nigeria’s Federal Executive Council of the new National Automotive Industry Development Plan (NAIDP) for 2023 will go a long way to strengthening any proposals emerging from the West Africa Automotive Show (WAAS) Conference in Lagos that opens tomorrow (May 16).

In its broad form, the NAIDP is intended to provide competitive fiscal and non-fiscal incentives needed by automotive industry manufacturers/producers, investors, developers and all relevant stakeholders.

The NAIDP is aimed at enabling the exponential increase in the local production numbers of vehicles, reaching 40% local content and attaining 30% locally produced Electric Vehicles.

In terms of WAAS, the primary issue, according to former National Automotive Design and Development Council (NADDC) director of planning and strategy, Luqman Mamudu, is the fact local manufacturing of parts and vehicle assembly have stalled, meaning the country relies on “imports of used parts and substandard new ones” with an import bill of $3,3-billion annually.

Mamudu, who will chair the conference at Nigeria’s largest automotive aftermarket trade event says:“I expect that the inaugural conference of WAAS and the show itself will deepen demand for new parts in Nigeria.

“The dominance of used parts potentially undermines any attempt at local manufacturing as they are far cheaper than the original new ones and are perceived as OEM (original equipment manufacturer) standard.”

“Another adverse impact of the full reliance of fully-built automotive importsis that certainly constitutes a strain on the balance of payment position and missed opportunities to create employment. This has the potential to undermine the economy. It is particularly worrying to me because 70% of this is accounted for by pre-owned vehicles and used parts obtained from salvage vehicles.”

However, there is strength in the Nigerian automotive industry with investment of more than $1-billion in manufacturing and assembly capability and he adds: “These facilities remain intact in the form of annual installed capacity of more than 500 000 vehicles. The presence of several global OEMs remains a pipeline of access to technology and capital once the environment is right. Nigeria also boasts a reserve of trained but presently unemployed skilled workforce.

‘By 2017 the NAIDP through a combination of fiscal incentives and protective measures grew installed assembly capacity to above 400,000 units per annum, but only 10% capacity utilisation has been recorded  due to weak policy implementation.

“But it is noteworthy that NAIDP caused the revitalisation of existing automotive assembly plants including Peugeot, Mercedes Trucks, and Volkswagen.”

Mamudu said the conference aims to highlight the need for safety and quality in automotive products.

“Used parts imports account for nearly 90% of aftermarket share. The reasons observed are varied but the preference for used components may be due to eroded confidence for new parts.

“Substandard new components and parts are common in the market, so people are suspicious. To build confidence, suppliers must deploy product quality standards tracking systems. Global brands must also expand their service and parts network as outlets for genuine parts,” he said.

What emerges from that conference will be eagerly awaited by all the stakeholders just as eager to see the full implementation of the African Continental Free Trade Area (AfCFTA), which will be a hot topic at the Intra Africa Trade Fair in Cairo later this year.

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Africa Automotive - Short haul to Cairo

The road to the Intra Africa Trade Fair (IATF) may have hit a pothole with the late venue change from Abidjan to Cairo, Egypt but a strong turnout from South African business executives at a recent roadshow in Johannesburg confirmed a strong interest.

Indeed, as Mike Whitfield, President of the African Association of Automotive Manufacturers (AAAM) said during the panel discussion: “If we do not focus on competitiveness, the others out there are ready and moving fast.”

Mike Whitfield

While he was speaking specifically about the auto industry and the Africa Automotive Show, the comment could equally be applied across all spheres of business in this country.

Although backed up and supported by the Department of Trade and Industry (DTI), which talks a big game, that entity is still severely hampered by most of its key players on the critical injury list – Iscor, Eskom, Transnet etc.

Nevertheless, the DTI fully backs the IATF and the ongoing efforts to formally create a working African Continental Free Trade Area (AfCFTA) that will benefit South African business as well as the rest of Africa by stimulating trade, lowering entry barriers to business and creating job opportunities across the continent.

Dave Coffey the CEO of AAAM says “We believe the Africa Automotive Show is well timed as the automotive industry is gaining traction in Africa where we will see trading of vehicles between assembly hubs across the continent supported by the development of regional value chains.”

Panyaza Lesufi

Perhaps the biggest rev up to the business delegates came from Gauteng Premier, Panyaza Lesufi who said: “Less talk, more work. The days of celebrating agreements are over, the days of celebrating transactions are within us.

“If it is Africa's time, let that time be the time for everyone. We must not leave anyone behind. The time of talking is over, the time of implementation is now! The time of meeting to change or amend agreements is over, the time to strengthen business transactions is now.

“Count on us, not today but forever!”

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