Africa is not known for the origin of car manufacturers. Recently, however, a young automotive industry has developed. The aim of local car manufacturers is to produce African products for the African market. Politicians strongly support these projects. They help to shift value creation to Africa. In this article, we introduce four African car manufacturers that are worth knowing.
The African car market is relatively small. According to Deloitte, only 44 out of 1,000 Africans own a car. The worldwide average is 180 out of 1,000 people. In 2015, about 1.55 million East Africa cars were sold in Africa. According to the sales trend, this figure could rise to as many as 10 million new cars within the next 15 years.
The African continent has a relatively low disposable income and the costs of new cars are high. Therefore used cars dominate the market, Deloitte continues. It is estimated that about 80 % of cars in Africa are used cars. They are usually imported. Most cars come from the US, followed by Europe and Japan.
Algeria, Egypt, Morocco and South Africa already have significant automotive industries. For example, VW manufactures the Polo model in South Africa and VW also operates a production plant in Rwanda. However, cars made in Africa account for only 0.9% of world production, according to Deloitte. The further development of the African automotive sector could have significant positive effects on the industrialisation of the continent. African policy therefore gives high priority to the development of the automotive industry.