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Also, the country developed an investment cluster program, which saw Renault enter the local market. Renault will be the only global automaker assembling vehicles in the country, until the arrival of Peugeot in 2019

ReportLinker
·5-min read

The African automotive market is valued at USD 28. 45 billion in 2020, and it is expected to reach USD 39. 87 billion by 2026, registering a CAGR of 5. 55% over the forecast period. However, the outbreak of pandemic COVID-19, impaced the market very badly and majority of markets in the region have not recovered and the demand is still lagging behind the pre-COVID levels.

New York, March 17, 2021 (GLOBE NEWSWIRE) -- Reportlinker.com announces the release of the report "Africa Automotive Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)" - https://www.reportlinker.com/p06036747/?utm_source=GNW


The demand for new vehicles across the African region has increased until 2018. During 2019, due to a slowdown in economy, the sales of new vehicles has decreased by 4% to 1.17 million units, as compared to 1.22 million units in 2018. Passenger cars accounted for 73.81%, while commercial vehicles accounted for 26.18%.

Although there was a decline in the overall sales of new vehicles, commercial vehicles in 2019 has increased by 0.33% to 308,319 units as compared to 307,301 units sold in 2018. Furthemorer, Egypt in 2020 has witnessed increase in new vehicle sales by 26.55% to 231,238 units in 2020 as compared to 182,713 units sold in 2019.

The African market has one of the highest growth prospective across the world. Multinational vehicle manufacturers currently setting up production plants in Angola, Ethiopia, Ghana, Kenya, Namibia, Nigeria, Rwanda, South Africa and other countries, are a clear indicator that there is potential to boost manufacturing for the automotive market in this region. South Africa, Egypt, Morocco, and Algeria have sizeable automotive assembly and manufacturing sectors.

Key Market Trends
Growing Economy and Government Initiatives Expected to Help the Automotive Industry

The African market has high growth prospects. For a continent with 1 billion inhabitants, it only occupies 1% of the global new car sales. Also, 85% of the total new cars are sold in South Africa itself. The sub-Saharan region where there is a potential for upto 3-4 million cars from the existing number of around 425,000 is expected to offer high returns to players who are willing to seriously enter the region.

After the formation of Association of African Automotive Manufacturers (AAAM) companies are expected to benefit from reforms and policies. For instance, any car company that sets up a local assembly plant in Nigeria, Kenya and Ghana, could get tax holidays of up to 10 years and duty exemptions.

The level of infrastructure is also increasing in Africa, which is likely to aid the automotive market of the region. Western and Northern Africa is expected to drive the growth till 2023, where countries like Ghana and Morocco are expected to be the key players.

Ghana aims to become a developed country by 2030, and even if the target is met halfway, the Ghanaian automotive market is anticipated to grow at a tremendous pace, as the economic growth is directly proportional to the growth of automotive markets.

Morocco’s integration into the global economy was facilitated by the signing of numerous free trade agreements with the European Union and the United States. These trade agreements contributed positively toward the emergence of export activities in the country.

Also, the country developed an investment cluster program, which saw Renault enter the local market. Renault will be the only global automaker assembling vehicles in the country, until the arrival of Peugeot in 2019.

South Africa Expected to be the largest automotive industry in the continent

The South African automotive industry is the largest in the region. However, during the year 2019, it witnessed slight downfall in sales figures. During the year 2019, 355,378 units were sold as compared to 365,242 units in the year 2018, which is a fall of around 2.7%. Similarly, the commercial vehicle segment in the country witnessed a downfall of around 3.07% and registered sales of 181,233 units of commercial vehicles sales in the year 2019. In 2020, according to the National Association of Automobile manufacturers of South Africa, the vehicle sales in the country declined by 29.1%, which is because of the pandemic COVID-19.

The country is a hub for exports of passenger cars in several other parts of the world, especially Europe. Export sales, recorded a second consecutive month of solid growth in January 2021 and at 22,771 units reflected an increase of 6,468 units, or 39,7%, compared to the 16,303 vehicles exported in January 2020. Several major OEMs, from all over the world are investing in the country, for instance,

- In April 2019, Ford announced that Ford Motor Company of Southern Africa (FMCSA) is expanding its vehicle export operations by adopting a multi-port strategy with the first shipment of 1,000 locally assembled Ford Rangers from Port Elizabeth to markets in Europe.
- In April 2019, Nissan announced that it is investing a ZAR 3 billion in its facility in Rosslyn, Pretoria to produce the next generation Nissan Navara pickup.

However, increased competition from the used vehicle market and weak domestic demand – which is further compounded by constrained household finances (even with low-interest rates) and high unemployment are major concerns for the automotive industry in the country. Yet, with aforementioned trends and developments it is expected that the market studied will experience growth during the forecast period.

Competitive Landscape
The Africa Automotive Market is dominated by manufacturers such as Volkswagen AG, Toyota Motor Corporation, Groupe Renault (including Dacia Sales), Daimler AG, Ford Motor Company, Hyundai Motor Company, and Isuzu Motors, among others.

Manufacturers are focusing on strategies to improve their business across the region. For instance:
- In June 2020, Nissan Africa, Middle East and India (AMI) presented a comprehensive four-year strategy for the region under the company’s Global Transformation Plan. The plan aligns with the global direction of rationalization, prioritization and focus to bring core models and technologies to a region that accounts for around 10% of the world automotive market.

Reasons to Purchase this report:
- The market estimate (ME) sheet in Excel format
- 3 months of analyst support
Read the full report: https://www.reportlinker.com/p06036747/?utm_source=GNW

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