Africa Automotive - 2024 Growth of Africa's Automotive Sector

In 2024, Africa's automotive sector witnessed notable progress, primarily spurred by increased local production and advantageous trade policies. The continent is attracting a variety of automakers, both international and local, who recognise the potential within the region. This interest has led to a rise in automotive manufacturing plants across multiple African countries, reflecting a deliberate move towards regional production. The industry is also seeing a diversification of vehicle models being produced, catering to both local market demands and export opportunities.

Efforts to bolster the automotive industry are evident in the investments being made in infrastructure and technology. Countries such as South Africa, Nigeria, and Morocco are key players, offering a blend of skilled labour and favourable business environments. This development is creating job opportunities and fostering skills transfer, contributing to broader economic growth.

Another critical factor in this growth is the increasing collaboration between governments and industry stakeholders to create supportive policies and initiatives. These include tax incentives for manufacturers, streamlined customs procedures, and efforts to harmonise vehicle standards across the continent. Such measures are aimed at making Africa an attractive destination for automotive investment.

Furthermore, the push towards sustainability is also shaping the sector, with an increased focus on electric vehicles and green manufacturing practices. This trend is aligning with global shifts towards environmentally friendly motoring solutions, positioning Africa as a forward-thinking player in the global automotive arena.

For the best value in pre-owned cars and bakkies click here

Impact of the African Free Trade Agreement

The African Continental Free Trade Agreement (AfCFTA) has the potential to transform the automotive industry across the continent. By connecting more than1,3-billion people into a single market, the AfCFTA provides significant opportunities for automakers to expand their reach and streamline operations. Additionally, a World Economic Forum report anticipates that global business under this agreement could boost the African automotive industry by $12-billion by 2027. These developments promise a more integrated market, reducing tariffs and improving trade efficiencies among African nations.

The removal of trade barriers under the AfCFTA is expected to ease the movement of automotive components and finished vehicles across borders. This will likely result in lower costs for manufacturers and consumers alike, fostering a more competitive market environment. Additionally, the agreement encourages regional value chains, allowing different African countries to specialise in various stages of vehicle production. This approach can lead to increased efficiency and higher-quality outputs.

Moreover, the harmonisation of regulations and standards across member states will simplify compliance for automakers, making it easier for them to operate in multiple countries. This is particularly beneficial for small and medium-sized enterprises looking to enter the automotive market. The AfCFTA's emphasis on economic integration and industrialisation aligns with the broader goal of sustainable development, positioning Africa as an increasingly attractive destination for automotive investment.

Indicators of Growth in the Automotive Industry

We have a great selection of exotic cars as well - click here

The positive trajectory of Africa's automotive sector can be seen through various indicators. Afreximbank, in collaboration with the African Association of Automotive Manufacturers, is actively supporting industry growth. By harmonising automotive standards, developing training programmes, and providing financing, they aim to facilitate industry growth, with Afreximbank committing $1 billion to these efforts.

Vehicle production and sales figures are on the rise, reflecting increased consumer demand and manufacturing capacity. The establishment of new manufacturing plants in various African nations demonstrates robust confidence from both international and local investors. These investments are not only boosting production but also generating employment opportunities and enhancing skill development.

Furthermore, the automotive sector is benefiting from a rise in partnerships and joint ventures aimed at leveraging local expertise and global technology. This collaborative approach is leading to improved production processes and the introduction of innovative vehicle models tailored to the African market.

Another crucial indicator is the development of supply chain networks that are becoming more sophisticated, ensuring the efficient movement of automotive components and finished vehicles. These advancements are essential for meeting the growing demand for cars and motoring solutions across the continent.

In summary, these indicators highlight the increasing dynamism within Africa's automotive industry, showcasing a sector poised for sustained growth and development.

Industry Challenges

The African automotive industry, despite its promising growth, faces a range of challenges that could impede its progress. One of the most pressing issues is the inadequacy of infrastructure. In many regions, road networks and port facilities are not sufficiently developed to support efficient supply chain operations. This situation creates bottlenecks that can delay the movement of automotive components and finished vehicles, thereby increasing costs and affecting competitiveness.

Economic instability in some African nations also poses significant risks to the industry's growth. Fluctuations in currency values and inflation rates can create an unpredictable business environment, making it difficult for automakers to plan long-term investments. Additionally, political instability in certain areas can deter potential investors and disrupt existing operations.

Another challenge lies in the regulatory landscape, which can vary significantly from one country to another. This lack of uniformity complicates compliance for automakers, particularly those looking to operate across multiple African nations. While efforts are being made to harmonise vehicle standards under initiatives like the AfCFTA, achieving comprehensive regulatory alignment remains a work in progress.

Furthermore, access to financing is a critical hurdle for many local enterprises looking to enter the automotive sector. High interest rates and limited availability of credit can stifle innovation and restrict the growth of small and medium-sized enterprises that are essential for a vibrant automotive ecosystem.

Labour issues, such as the availability of skilled workers, also present obstacles. While some countries are investing in training programmes, the overall skill level of the workforce needs to be elevated to meet the demands of advanced automotive manufacturing.

For the best insurance deal click here

Technological Progress and Innovation

Technological advancements are playing a pivotal role in Africa's automotive evolution. There is a noticeable rise in electric vehicle production and adoption, driven by the continent's commitment to sustainable development. Pilot projects for sustainable vehicles are already underway in Rwanda, Egypt, and South Africa, with e-mobility startups emerging across the continent. The introduction of smart technologies in vehicles, such as advanced driver-assistance systems and connectivity features, highlights Africa's readiness to embrace innovation and align with global automotive trends.

Market Potential and Consumer Preferences

Africa's automotive market is burgeoning, spurred by emerging economies and an expanding middle class. These factors are significantly reshaping consumer preferences across the continent. There's a noticeable shift towards vehicles that prioritise sustainability, reflecting broader global trends towards environmentally conscious motoring. This change in preference offers automakers a valuable opportunity to introduce eco-friendly models that align with the increasing environmental awareness among African consumers.

In addition to the demand for sustainable vehicles, there's a growing appetite for advanced features and technologies in cars. African consumers are becoming more discerning, seeking vehicles equipped with the latest in safety, connectivity, and comfort. This trend is pushing automakers to innovate and adapt their offerings to meet these evolving expectations.

Moreover, the rise in disposable income among the middle class is leading to a higher demand for a diverse range of vehicles, from economical models to luxury cars. This diversity in consumer demand is encouraging manufacturers to broaden their portfolios to cater to different segments of the market. The interest in luxury and premium vehicles, in particular, is indicative of a market that is maturing and becoming more sophisticated.

The burgeoning interest in electric vehicles is another critical aspect of the changing market dynamics. Governments and private entities alike are increasingly promoting electric mobility as a sustainable alternative to traditional combustion engines. This is not only in line with global sustainability goals but also addresses local issues such as urban air pollution and fuel dependency.

Overall, the evolving market potential and consumer preferences in Africa present a promising landscape for the automotive industry. By responding to these trends, automakers can tap into a market that is both growing and increasingly sophisticated in its demands.

Want to check the numbers - use our finance calculator to find your perfect deal

Future Outlook and Opportunities

Looking ahead, Africa's automotive sector is poised for further advancement, driven by a combination of strategic investments, policy reforms, and technological innovation. The region's commitment to enhancing infrastructure and reducing trade barriers sets the stage for a more integrated and efficient automotive industry. Continued collaboration between governments and industry stakeholders will be crucial in creating an environment conducive to growth and innovation.

One of the most promising opportunities lies in the development of electric vehicles, with several countries already pioneering initiatives in this space. The shift towards sustainable motoring not only aligns with global trends but also addresses local challenges such as air quality and fuel dependency. This focus on green technology could position Africa as a leader in the adoption of environmentally friendly automotive solutions.

Additionally, the rising middle class and increasing urbanisation are expected to drive demand for a diverse range of vehicles, from budget-friendly models to premium cars. This expanding market offers a lucrative opportunity for automakers willing to tailor their offerings to meet the specific needs and preferences of African consumers.

Partnerships and joint ventures between local firms and global automakers are likely to enhance the transfer of knowledge and technology, fostering innovation and boosting production capabilities. As these collaborations flourish, they will contribute to the overall competitiveness of Africa's automotive sector on the global stage.

In summary, the future of Africa's automotive industry holds significant promise, with numerous opportunities for growth and development as the continent continues to embrace modernisation and innovation.

Originally published on CHANGECARS

https://bit.ly/4gWA5Ej

Daimler Truck achieves production milestone

Daimler Truck Southern Africa (DTSA), the East London-based truck assembly plant, marked a significant achievement recently by officially rolling off the 800 000th Completely Knocked Down (CKD) kit from its parent factory in Woerth, Germany.

The vehicle, a Mercedes-Benz Actros 2645LS/33, emerged from the assembly line in a joint celebration with the Woerth source plant in Germany. Sesfigile Logistics and Safety One Logistics, both owned by Nelen Gounder, purchased the truck to commemorate their respective 20th and 10th anniversaries.

The Woerth plant, founded in 1963, is Mercedes-Benz Trucks’ largest truck assembly facility. Here, the Actros, Arocs, and Atego model series take shape. Additionally, Woerth produces the battery-electric Mercedes-Benz eActros 300/400 for distribution haulage, along with the eEconic electric series-production truck for municipal use. The eActros 600, designed for long-distance haulage, is set to enter series production by the end of 2024.

The East London assembly plant boasts a storied history spanning six decades. From the first Mercedes-Benz Truck in 1962 to thousands of trucks and buses today, the plant remains a cornerstone of the Buffalo City Metropolitan Municipality.

Employing around 300 people, it ranks among Daimler Truck’s largest CKD-plants outside Europe. In 2019, DTSA assembled its 750 000th CKD unit, a Mercedes-Benz Actros 2652 LS 6×4.

Gladstone Mtyoko, Vice President for Manufacturing, acknowledged the complexity of assembling products from four different source plants on a single production line. Despite this, the team consistently delivers high-quality units. The assembly of the 800 000th CKD truck stands as a proud milestone for both the Woerth and local East London plants.

Sesfigile Logistics commands a fleet of 200 trucks, specializing in beverage and petroleum transportation. Its reach spans local, national and cross-border logistics, while. Safety One Logistics, grounded in precision and efficiency, handles petroleum and specialized products with care.

https://bit.ly/4dWJjz3

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)

https://bit.ly/3AaWuxt

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

https://bit.ly/47qlLza

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

https://bit.ly/40fgmJ1

Egypt licenses local electric car factory to start production by end of 2024 - Economy - Business

The Egyptian Cabinet agreed to grant the golden licence to private company EgyptSat Auto to build and operate a factory that will begin producing electric vehicles (EVs) by the end of 2024.


Source: Egypt licenses local electric car factory to start production by end of 2024 - Economy - Business
https://bit.ly/3ZplVnD

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.  

https://bit.ly/3DDxFZG

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."

https://bit.ly/441hbpR

Africa Automotive - Call to share technology

A recent call by the Arab parliament for Morocco to share its experience and know-how in the automobile industry confirms African countries' accelerating desire to become active players in this ever-growing sector with their own facilities.

Morocco is gearing up to produce 2-million cars a year and the automotive manufacturing scene in Morocco has experienced significant growth and development in recent years.

The country has become an attractive destination for automotive manufacturing due to its strategic geographic location, favourable business environment, and government support.

Morocco's automotive industry has been bolstered by the establishment of several major automotive manufacturing plants, both by international companies and local manufacturers. Some notable companies that have set up production facilities in Morocco include Renault, PSA Group (Peugeot-Citroën), and Ford.

These companies have invested heavily in the country, creating job opportunities and contributing to economic growth.

Incentives

Morocco has actively pursued policies to attract automotive manufacturers, offering various incentives such as tax breaks, investment subsidies, and a skilled labour force. The government has also invested in infrastructure development, including the construction of industrial parks and specialized training centres for automotive manufacturing.

The country's automotive manufacturing sector primarily focuses on vehicle assembly, although there has been an increasing emphasis on developing local supply chains and promoting the production of components and parts within Morocco. This localization strategy aims to enhance the country's competitiveness and reduce dependence on imported components.

In terms of technology, Morocco has made strides in adopting advanced manufacturing processes and digitalization in its automotive industry. Many manufacturers have implemented Industry 4.0 technologies such as robotics, automation, and data analytics to improve efficiency and productivity.

Research

The government has also emphasized the importance of research and development (R&D) in the automotive sector, encouraging collaboration between industry players and academic institutions.

As for offering technology to other countries, Morocco can indeed leverage its automotive manufacturing capabilities and expertise to expand its international footprint. By exporting technology and sharing best practices, Morocco can enhance its reputation as a reliable and competitive player in the global automotive industry. This can lead to further investment, job creation, and economic growth.

Moreover, technology transfer can facilitate knowledge exchange and collaboration between Morocco and other countries, fostering innovation and mutual development. It can also open up new avenues for partnerships and joint ventures, benefiting both Moroccan companies and their international counterparts.

Morocco recently lifted the curtain on two prototypes made by Moroccans in the field of the automotive sector. The first was a conventional car targeting the wider public named ‘Neo Motors’ and the second was a forward-looking hydrogen-powered car.

https://bit.ly/3MA5Qpa

Africa Automotive - Volkswagen supports Africa growth

Volkswagen is fully supportive of growth in the automotive industry in Africa, having taken over the assembly responsibilities of the plant in Ghana from its licenced importer, Universal Motors Limited.

The Africa Union commemorates it 60th anniversary this year on Africa Day with the slogan ‘Our Africa, Our Future’ and this slogan resonates strongly with Volkswagen as the company continues to grow its presence on the continent.

Ghana is the fourth Volkswagen assembly location in Sub-Saharan Africa after Kenya, Rwanda and South Africa, where Volkswagen has been manufacturing vehicles for more than 72 years.

Volkswagen Group South Africa (VWSA) Chairperson and Managing Director, Martina Biene, is positive about Africa’s growth potential, saying a number of African countries have introduced compelling incentive plans for locally assembled vehicles to attract OEMs such as Volkswagen to invest in the development of the automotive industry on the continent.

From left Volkswagen Ghana Chief Executive Officer, Jeffrey Peprah, Martina Biene, Chairperson and MD of Volkswagen Group South Africa, Andrew Potgieter, VWSA advisor to Ghana, Ulrich Schwabe, VWSA Production Director and Thomas Milz VWSA Sales and Marketing Director at the recent Ghana plant opening.

“We are encouraged by the automotive policy changes which some of the countries have implemented or in the process of implementing. These policies will help us to sell new high-quality vehicles which are backed by a well-established global brand to our African customers,” said Biene.

Biene added Sub-Saharan Africa has become very important for the sustainability of Volkswagen.

Future

“The future of Volkswagen is in Africa. We are therefore accelerating our growth strategy on the continent by playing a pioneering and leading role in the development of the automotive industry.”

Volkswagen already has a presence in 17 countries in Sub-Saharan Africa where it sells passenger and commercial vehicles through licensed importers.

“We will continue to grow the Volkswagen brand in these markets and strengthen our aftersales support to customers. Ongoing training is provided to technical staff at the Volkswagen locations to meet customer requirements and expectations,” Biene added.

Growing

According to the African Development Bank of the world’s 10 fastest growing economies, five are in Africa - Rwanda, Côte d’Ivoire, Benin, Ethiopia and Tanzania.

Biene affirmed Rwanda and Côte d’Ivoire are also two of Volkswagen’s fastest-growing markets. Rwanda, with an economy growing at close to 8%, shows significant potential for increased mobility solutions and electric vehicles due to its relatively young, tech-savvy population and growing middle class.

“Rwanda has been the success story of our growth plans in Sub-Saharan Africa. It is also the innovation hub of our sustainable mobility lighthouse projects on the continent. Our mobility solutions services business, which includes ride-hailing and corporate car sharing, broke even last year. Rwanda was also the first country in Sub-Saharan Africa to launch a Volkswagen electric vehicle with the e-Golfs,” concluded Biene. 

https://bit.ly/3OECKYs

Africa Automotive - Electric deals for Cairo

Stellantis, the global auto giant formed out of the merger between the PSA Peugeot Citroën Group and Fiat Chrysler, is to spend around $35-billion to build a factory in Cairo for the manufacture and export of electric vehicles by 2025, while Ashok Leyland from India is also looking to Cairo as a market for its buses.

The Ashok Leyland venture comes with the signing of a joint venture deal with Egyptian car manufacturer El Nasr Automotive Manufacturing and, initially, will extend and modernise an El Nasr factory in Cairo that will produce trucks, vans, pick-ups and buses in all-electric mode.

Ashok Leyland is looking to see its range of ‘circuit’ buses moving about African roads – this vehicle with artificial intelligence (AI) needs a single daily charge to travel up to 120 kilometres.

In recent years, the global automotive industry has witnessed a significant shift towards sustainable transportation solutions, with electric vehicles (EVs) emerging as a promising alternative to traditional fossil fuel-powered cars.

While the adoption of EVs has gained momentum in many parts of the world, Africa, with its unique set of challenges and opportunities, is gradually making progress in embracing this transformative technology. This article delves into the advancements of electric vehicles in Africa, exploring the driving forces behind their growth, notable initiatives, and the potential impact on the continent's sustainable development.

Challenges and Opportunities

Africa faces several challenges when it comes to the widespread adoption of electric vehicles. These challenges include limited charging infrastructure, high upfront costs, inadequate access to electricity, and concerns about range anxiety.

However, amidst these challenges lie opportunities that can be leveraged to accelerate the growth of EVs. Africa's abundant renewable energy resources, such as solar and wind, present an ideal foundation for sustainable charging infrastructure. Additionally, the continent's rising middle class, urbanisation trends, and the need for cleaner transportation solutions create a fertile ground for EV market growth.

Public-private partnerships and investments play a crucial role in driving the progress of electric vehicles in Africa. International organisations, development banks, and private companies have recognised the potential of the African market and are investing in various EV-related initiatives.

For example, the African Development Bank launched the ‘Green Mini-Grid Market Development Program’ to support the deployment of off-grid renewable energy systems, including solar-powered charging stations. Companies such as Tesla, BYD, and Nissan have also shown interest in expanding their presence in Africa, either through partnerships or direct investments.

Public transportation represents a significant opportunity for electric vehicle adoption in Africa. Many African cities are characterised by congested roads and poor air quality, making the transition to electric buses a viable solution.

https://bit.ly/435QmjX

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.

https://bit.ly/3U75Lgb

Colin-on-Cars - First Ranger off the line

After months of build-up news, a factory ‘unveiling’ and more than plenty hype, Ford Motor Company’s Silverton Assembly Plant in Pretoria, today became the third plant to commence production of the new Ranger for customers around the world.

The start of the production follows a major investment of US$1,05-billion (R15,8 billion) in Ford’s South African operations and supplier tooling to allow exports to more than 100 markets, including Europe.

Ford Motor Company now has three production hubs in the International Markets Group (IMG) region producing Next-Gen Ranger for global markets, including the Silverton plant in South Africa, and two plants in Thailand. The company also has CKD operations in Vietnam and Cambodia to assemble the Ranger, with plants in the US and Argentina to begin production in 2023.

Commitment

“The start of Ranger production in South Africa highlights our commitment to delivering must-have products for our customers, not just in South Africa but around the world,” says Dianne Craig, president of Ford International Markets Group (IMG).

“South Africa is an important part of our global Ranger manufacturing network, and it is fantastic to witness the investment being utilised to modernise and transform the Silverton Assembly Plant to produce vehicles of the absolute best quality for customers around the world.”

The expanded operations in South Africa contribute to job creation and economic development, with 1 200 new jobs added for a third shift to support the increased production volumes. This takes the workforce at Ford South Africa to 5 500 employees. Ford’s supplier network benefits too, with approximately 10 000 jobs added across the value chain.

Of the total investment, approximately US$686-million (R10,3 billion) has gone into the transformation and modernisation of the Silverton plant with the construction of its first on-site Stamping Plant, a new highly automated Body Shop, and the introduction of the latest vehicle assembly operations on the Trim, Chassis and Final line.

Furthermore, the only Ford-owned and operated Frame Line in the world was built in the new Tshwane Automotive Special Economic Zone (TASEZ) supplier park adjacent to the Silverton Assembly Plant. Ford’s investment in tooling at its major supplier companies totalled US$365-million (R5,5-billion).

In addition to the Silverton investment, Ford injected US$34-million (R600-million) into its Struandale Engine Plant in Gqeberha (formerly Port Elizabeth), which produces all the engines used in the new Ranger.

The investment in Struandale Engine Plant has helped Ford introduce the new 3,0-litre V6 Diesel engine program, comprising cylinder head machining and engine assembly. Upgrades for the Ranger were also implemented on the existing assembly line for the 2,0-litre Single Turbo and 2,0-litre B-Turbo diesel engines.

“We have put immense effort, resources, and the latest technologies in place to ensure the Ranger is truly world-class, and that the Silverton plant globally equals the very best,” says Andrea Cavallaro, Director Operations, Ford IMG.

“We took several strategic decisions including the decision to bring the stamping operations and the frame manufacturing in-house, to ensure complete control of the production quality. The process put in today guarantees that the components going onto the assembly line for every Next-Gen Ranger are of the highest quality.”

The Stamping Plant at the Silverton Assembly Plant is in a new 10 320 m2 facility and feeds stamped body panels directly to the adjacent and completely new 44 000 m2 Body Shop, which is highly automated with approximately 493 robots.

Technologies

“To meet our volume and quality objectives, we have the world’s only Ford-owned and operated chassis manufacturing plant at the Silverton plant that uses the most advanced technologies currently available,” Cavallaro added.  

In addition, the 100 000 m2 Frame Line in the Tshwane Automotive Special Economic Zone (TASEZ) supplier park, located next door to the Silverton Assembly Plant, ensures the seamless sequencing of parts directly to the assembly line.

First launched in 2011, the Ranger remained one of the leading contenders in the local market over the ensuing 11 years, earning a long list of accolades in the process.

“The success of the Ranger globally establishes it as one of Ford’s most important nameplates sold in every continent,” said Neale Hill, President, Ford Motor Company Africa. “The Next-Gen Ranger is sure to raise the bar yet again and with the start of production in the Silverton assembly plant, South Africa is proud to play a role in its growth.”

What now remains to be seen is if Ford South Africa will continue to build a range of the older version to service its large corporate market.

To my mind this is a no-brainer, especially considering the final few months of production of the outgoing model were done on the new Ranger line as a kind of tesdt bed production – so there is no reason why both cannot co-exist.

First Ranger off the line: https://www.youtube.com/watch?v=wD3xnh7cHsE

https://bit.ly/3tzpLeP

Colin-on-Cars - Fossil-free steel for Volvo Trucks

With around 90% of the truck recyclable at the end of its working life, Volvo Trucks has now become the first manufacturer to use fossil-free steel in the manufacturing process.

The fossil-free steel is produced by the Swedish steel manufacturer SSAB and is made by using a completely new technology with fossil-free electricity and hydrogen. The result is a significantly lower climate impact and an important step towards a net-zero emissions value chain. Among the customers that will have fossil-free steel in some of their electric trucks are Amazon and DFDS and, through the transport company Simon Loos, Unilever.

Global

In September this year, Volvo Trucks started series production of heavy-duty electric, 44-tonne trucks, as the first global truck manufacturer to achieve this. Some of the electric trucks will also be the first trucks in the world that are built with fossil-free steel.

“Our journey to net zero emissions includes both making our vehicles fossil free in operation and over time fully replacing the material in our trucks with fossil-free and recycled alternatives,” says Jessica Sandström, Senior Vice President of Product Management at Volvo Trucks.

“At Amazon, we are on the way to making all of our operations net-zero carbon by 2040. We need partners like Volvo to make this transition happen,” says Andreas Marschner, Vice President Transportation Services Europe at Amazon.

“DFDS is committed to our green transition and to delivering greener transport and logistics solutions. Any step in the green transition of logistics brings us closer to a carbon-free society and we are therefore happy to learn that some of our new electric trucks soon to be delivered are also produced with fossil-free steel,” says Niklas Andersson, EVP of DFDS Logistics Division.

The first steel produced with hydrogen is being used in the electric truck’s frame rails, the backbone of the truck upon which all other main components are mounted. As the availability of fossil-free steel increases, it will also be introduced in other parts of the truck.

Recycled

Today, around 30% of the materials in a new Volvo truck come from recycled materials. Also, up to 90% of the truck can be recycled at the end of its life. Fossil-free steel will be an important complement to the traditional and recycled steel used in Volvo’s trucks.

Volvo Trucks is committed to the Paris agreement on climate change and to achieving net-zero greenhouse gas emissions in the entire value chain by 2040, at the latest.

https://bit.ly/3WXgdrr

Colin-on-Cars - Volvo Trucks assembles Euro 5 locally

Although Euro 5 truck variants have been available in South Africa since 2012, these are now being assembled at the Volvo Trucks South Africa assembly plant in Durban, KwaZulu-Natal.

“More customers have ambitions to improve their environmental footprint, which is driving the uptake of Euro 5 models locally,” says Eric Parry, Sustainability Manager at Volvo Trucks SA.

“In general, the Euro 5 engines have a lower fuel consumption than an equivalent Euro 3 unit, which means even though total costs are roughly the same because of the need for AdBlue diesel exhaust fluid on the vehicle, the CO2 emissions are reduced with the lowering of fuel consumption.

“There is also the significant reduction in poisonous gases from the exhaust, which in turn improves the environment around the vehicle.”

Production

Euro 5 assembly at the plant does not come at the expense of the production of the company’s current range, it is complimentary.

Volvo Trucks has initially started with the assembly of Euro 5 level FH truck-tractors, the company’s long-haul icon, as this is the model customers are asking for. More models and configurations will be added over time as fleet owners require them.

“The need for local assembly also arose to reduce the import duty that is applied to full imports. This allows Volvo Trucks the opportunity to offer the cleaner technology in a more competitive way,” comments Parry.

Certain layout changes were made to the facility to accommodate AdBlue filling in trucks, as well as for storage. Additional floor layout adjustments were also done to allow for new procedures like the assembly of AdBlue tanks and special exhaust systems.

Assemble

“Operators have also received advanced training to assemble the new features connected to the Euro 5 specifications. Specialised training was also provided for road testers and product auditors to ensure the highest standards are maintained throughout the assembly and QA processes,” explains Aubrey Rambau, Volvo Trucks Plant Director.

“Quality is the basis of everything we do. From the way we design, manufacture and test our trucks, to the services, parts and people who support them.”

The Volvo Trucks plant has also recently installed a new solar power system to generate renewable energy for the facility. A total of 440 solar panels and two solar inverters will generate 243 kW of power - approximately 60% of the energy needed for the plant.

“At Volvo, environmental care is fundamental to how we do business, and this project is another step in our energy efficiency journey,” says Rambau. “We believe in sustainable transport solutions. And we’re confident that our trucks, services and operations will lead the way there.”

https://bit.ly/3D27Cvv

Colin-on-Cars - Unlocking the opportunities for electric vehicle manufacturing in South Africa

Electric vehicles are the future of transportation, with many countries already putting a time limit on the future of fossil fuel driven cars. In South Africa, this is both a challenge and an enormous opportunity.

The import duties on these vehicles are prohibitively high, which means there isn’t much incentive to bring them into the country. However, it also means that manufacturing them locally would be incredibly beneficial, not only in terms of carbon emissions reduction, but also job creation and economic sustainability.

We already have everything we need to unlock this opportunity, it is simply a matter of adjustment, and it could be a sustainable long-term solution for economic progression.

Poised for success

The difference between an electric vehicle and one driven by fossil fuels is the engine, and the battery storage needed. South Africa already has vehicle manufacturing setups in place, as well as manufacturing facilities for battery storage. We also have the capability to mine lithium locally, which is a vital component in the manufacturing of lithium-ion batteries.

Our climate in South Africa is ideal, and we already have functional ports in place for export as well as plans to expand ports in areas like Gqeberha and Richards Bay. There are also plans in place to extend the special economic tax-free zones for manufacturing, both on the coast and inland.

Image by (Joenomias) Menno de Jong from Pixabay

The rail infrastructure needs to be extended and improved, and the private sector needs to be more involved to enable greater efficiency, improved maintenance, and a more cost-conscious rail transport network. This is critical to facilitating more inland manufacturing of the various components.

Bringing it all together

South Africa has both the capability and the capacity to become a significant player in the electric vehicle manufacturing space, but all the elements need to be brought together, and supply chain and logistics challenges addressed, so that we can unlock this significant opportunity.

This will involve collaboration between government, state-owned entities, and the private sector since everyone will need to work together to offer an effective solution to the global market. 

The labour component

From a labour perspective, there is a great opportunity to build and connect the supply chain and create the entire ecosystem necessary for the manufacture, assembly, and export of electric vehicles. There are also therefore many job opportunities throughout the value chain.

Some of the jobs that will be created are highly specialised and skilled, so we will need to source this expertise globally and then ensure that local training and skills transfer takes place so that our engineers and designers can upskill, and this can filter downstream.

Image by Goran Horvat from Pixabay

Upskilling, cross-skilling and preparing people for the different roles associated with the manufacture of electric vehicles is crucial. Having the right Temporary Employment Services (TES) partner throughout the development and evolution of this up-and-coming sector can be hugely beneficial.

A reputable, experienced TES partner will have the affiliations with training companies and accreditations with the various Sector Education Training Authorities (SETAs), which is vital for obtaining funding for training. In addition, TES providers can leverage this opportunity for individuals who have the skills and have had to seek work elsewhere to be repatriated back to South Africa and provide sustainable employment through a broad base of clients.

Unlocking the opportunity

Even looking at one area of battery manufacture, the opportunity is huge. If we manufacture the batteries here, they will be less costly for locals who wish to purchase electric vehicles. We will also be able to recycle them here, which is currently a significant environmental concern.

However, we need to start with manual skills, and then automate to reduce cost, which will in turn create greater demand, more growth, and a circular economy. There are so many opportunities, from one end of the supply chain to the other but having the right TES partner lies at the very heart of unlocking this opportunity for economic progression.

By Viren Sookhun, MD at Oxyon

https://bit.ly/3AkIUFU

Colin-on-Cars - Isuzu pitches in

Colin-on-Cars - Isuzu pitches in

The South African Automotive Masterplan (SAAM) aims to achieve 60% localisation of components by 2035 and Isuzu Motors South Africa has pitched in with an investment of R580-million – a move that includes provision of the supplier tooling needed to manufacture specific components in preparation for the recently launched all-new 7th generation Isuzu D-MAX bakkie.

This has been a four-year journey for Isuzu and one they have travelled together with their local suppliers, as they embarked on a new sourcing strategy at the beginning of 2018. 

Technical

The process included classifying local suppliers that had the technical capability to manufacture a list of Isuzu components required for the new D-MAX bakkie.

Billy Tom, Isuzu Motors South Africa President and CEO says, “Localisation is essential in transforming the automotive sector. SAAM 2035 could see the automotive industry growing from 600 000 to 1,4-million vehicles a year in production. 

Opportunity

"This presents a huge opportunity for us to support black-owned automotive suppliers in building their businesses in the industry. It will help drive transformation and create jobs."

“With the relevant commodities intellectual property rights secured we’ve collaborated with our local supply partners to develop the necessary capabilities to sustainably manufacture those commodities in South Africa,” says Komane Pitso, Isuzu Motors South Africa Senior Vice President Commercial Operations.

Consequent to the R580-million investment, suppliers now have the necessary machinery and equipment required to manufacture the components needed by Isuzu. 

Process

Through this process Isuzu has had the opportunity to work with 107 local component manufacturers, maintaining a local value add content footprint and creating at least 235 new job opportunities at local component manufacturers.

One such example of our localisation strategy is the partnership between Isuzu Motors South Africa and 73% black-owned supplier Acoustics, based in Gqeberha. They were awarded with both the sound and carpet assembly contracts specifically for the new D-MAX bakkie.

Assisted

Responsible for the manufacturing of smaller boot liners, Acoustics have assisted Isuzu in achieving an industry first through the installation of local vinyl mats.

“We have to do things differently if we are to draw on local content, and Acoustics is an example of drawing on local content and capabilities. Over the last few decades design capability has transitioned to being more multinational, so we have to get involved locally,” says Pitso.

“Great strides have been made in the alliance between the automotive industry and government, and the progressive automotive policies in the country are testament to the strength of the pro-government/industry collaboration. 

"But this isn’t enough, the automotive industry still faces tough challenges in accelerating localisation and developing a future-proof supply chain, and without localisation the automotive industry will struggle to remain competitive.” concludes Pitso.
https://bit.ly/3ybEMak

Colin-on-Cars - Driving Africa automotive forward

The African automotive business is driving forward and a Memorandum of Understanding (MOU) signed virtually between 12 automotive associations within the ambit of the EU-Africa Business Forum recently looks to accelerate the processes.

The automotive sector, whilst key for the industrialisation of Africa is often associated with several challenges including, persistent market fragmentation, lack of regulatory alignment between African countries and the two continents, industrial and trade policies not conducive to local and foreign investment, lack of access to finance for consumers, local suppliers and affordability.

Expand

However intra-African trade can be bolstered and diversified by developing a Pan African Auto Pact, which aims to expand the African new vehicle market from 1-million to 5-million units and connecting African regions for the common good.

A ‘coalition of the willing’ will see the development of manufacturing sites and allied industries and services – both for the OEM and supplier sector – thereby laying the foundation for Pan-African integrated automotive value chains, which will incorporate neighbouring countries to build a regional and continental production network.

Boost

The launch of the African Continental Free Trade Area (AfCFTA) gives a boost to pan-African trade and investment opportunities, especially for the automotive industry and creates the momentum to stimulate a European-African dialogue between policy makers and important stakeholders.

This was one of the catalysts that led to a joint initiative to develop an MOU amongst European and African Automotive Associations, which initially driven by the African Association of Automotive Manufacturers (AAAM), the German Association of the Automotive Industry (VDA) and the German-African Business Association (Afrika-Verein) has now grown into a cooperation between the 12 associations that signed the MOU, which has the support of both the African Union and the European Union.

Plan

The MOU encourages enhanced dialogue contributing to the development of a joint plan to grow the automotive sector in Africa, through integration into the global and European value chains resulting in quality jobs.

Whilst encouraging a favourable investment climate to support market integration and innovation and the joint creation of models of standardisation, harmonisation and safe mobility. Furthermore, it is intended to advance the debate about sustainability whilst considering alternative powertrains and digital solutions and to further develop affordable mobility solutions leading to a viable African vehicle market.

The MOU commits the 12 organisations to work jointly on several key priorities including:

- The setting-up of a permanent round table between the AU, EU, and industry associations in line with the spirit of an established European-African Business Network that will foster the dialogue between Africa and Europe.

- To request the EU and African countries Governments to pursue trade initiatives through the implementation of existing agreements to increase business opportunities and further expand EU-Africa trade in automotive products.

- It also commits to advance the integration of African companies into the global value chains and to support the building of the necessary infrastructure and logistics. This will include investment and growth opportunities provided for EU companies partnering with African companies and will result in supply chains being more easily accountable.

- The MOU further calls on the EU to enhance its support for the implementation of the African Continental Free Trade Area in view of favouring Africa’s industrialisation and the expansion of the African automotive market.

Importantly the MOU calls for governments to support knowledge transfer, provide financial resources and give political priority in establishing a pan-African production and trade system that will reinforce and expand existing African automotive value chains.

Support

Lastly it encourages the EU to support financially the development of sustainable and smart mobility and affordable vehicle financing solutions to increase the mobility of the population in African cities and support therefore infrastructure development.

Whilst also calling on public authorities to provide programs and financial support for research on alternative powertrains and the value chain of green technology solutions in Africa.

Commenting after the signing of the MOU, David Coffey the CEO of AAAM said: "The trade and investment climate in Africa can only be improved together. We are convinced Africa has great potential to develop a promising automotive industry that will provide long-term employment.

“The fact African and European associations have agreed on key points to further develop the industry on the continent is an important milestone. Now political representatives are to support this by creating the framework conditions for the industry to develop and grow."

Signatories of the MOU

African Association of Automotive Manufacturers (AAAM)

Dave Coffey, CEO

German-African Business Association (Afrika-Verein der deutschen Wirtschaft)

Dr. Markus Thill; Member of the Management Board

German Association of the Automotive Industry (VDA)

Andreas Rade, Managing Director

Kenya Association of Manufacturers (KAM)

Ashit Shah, Chairman Automotive Sector

Tunisian Automotive Association (TAA)

Myriam Elloumi, Vice President

National Association of Automotive Component and Allied Manufacturers (NACAAM), South Africa

Renai Moothilal, Executive Director

National Association of Automobile Manufacturers of South Africa (NAAMSA)

Mikel Mabasa, Chief Executive Officer

European Association of Automotive Suppliers (CLEPA)

Sigrid de Vries, Secretary General

European Business Council for Africa (EBCAM)

Dr. Markus Thill, Member of the Management Board AV

European Automobile Manufacturers’ Association (ACEA)

Eric-Mark Huitema, Director General

Nigeria Automotive Manufacturers Association (NAMA)

Tokunbo Aromolaran, Chairman

Automotive Assemblers Association Ghana (AAAG)

Jeffrey Peprah, President

https://bit.ly/3HWOgIh