IATF is the premier trade event in Africa

With a total manufactured or assembled vehicle production of one million, Africa is punching well below its weight that should see annual volumes of around five million, and there is enormous potential to scale up production.

Speaking as part of a panel discussion at the Intra Africa Trade Fair being held at the Durban ICC, minister of trade and industry, Ebrahim Patel, said one of the issues that needed resolution was the volume of imported second-hand cars coming into Africa.
Robert Cisek, chairman and CEO of Volkswagen South Africa, pointed out that 75% of the local production volume is exported to Europe, adding, “We should be exporting more to Africa.

“While used car imports are detrimental to growing the auto industry in Africa, the secondhand market is vital in the overall picture, but the used car market should be generated from within and come from replacement sales of new cars.”

The fact Africa is now a free-trade region is a vital step in accelerating the automotive sector on the continent and could, potentially, make it one of the largest trading blocks in the world.

“There is no way every country can have an auto manufacturing operation,” said Mike Whitfield, managing director: Nissan Africa regional business unit.

“However, if those other countries are willing, they can participate and cooperate in the value chain by hosting first, second or even third-tier manufacturers supplying the automotive industry.

“Though Africa is seeing booming population growth and rapid urbanisation, we lag behind significantly in motorisation rate, which will grow to from 1.1 million to five million vehicles by 2035.

To capitalise on the impact AfCFTA can have in unlocking our economic potential, we need to create automotive hubs to begin trading regionally and then across Africa, as well as provide safe and affordable mobility solutions on the continent.”

IATF is the premier trade event in Africa.

Throughout the week-long event, government, industry and non-profit stakeholders will have pivotal discussions on the implementation of AfCFTA – the creation of a single market for goods and services across 55 countries, aimed at boosting trade and investment.

Nissan has long been a supporter of the automotive industry’s development in Africa. With several decades of operations on the continent and a footprint spanning 48 markets, the company has invested in setting up manufacturing and assembly facilities to create a sub-regional hubs in the market.

This includes 100% Nissan investment manufacturing operations in Egypt and South Africa in addition to assembly facilities in Ghana and Nigeria.

The South African operation, which recently began producing the all-new Nissan Navara after a R3-billion investment in plant upgrades and skills development, serves as a gateway to the remainder of the continent, with a vision to grow exports beyond the region.

The key element to growing the sector is industrialisation across the continent along with achieving levels of standardisation in terms of customs and other regulations as well as defining policies with the regard to rules of origin.

According to Andrew Kirby, president and CEO of Toyota Motors South Africa, the average local content in vehicles manufactured in South Africa is above 50% and achieving quite a high value for the whole of Africa would not be an insurmountable task.

At the recent ceremony to mark the first Corolla Cross Hybrid off the local production line, Kirby said, “A significant focus during the project was to maximise the local content for this model. We have localised 621 parts with 56 local suppliers of which 16 are black owned. We onboarded five new tier-one suppliers and 12 new Tier-2/3 suppliers.”

“For those countries that have or are aiming toward auto production, a semi-knocked down (SKD) assembly is a good start and demand will decided the move upwards to completely knocked down (CKD) assembly and possibly full scale manufacturing.”

In a demonstration of pan-African leadership support for the Intra-African Trade Fair, underscoring its importance and beneficial impact in driving dramatic trade growth and investment across Africa, its opening ceremony was addressed by seven African heads of states: Cyril Ramaphosa (South Africa), Muhammadu Buhari (Nigeria), former president Olusegun Obasanjo, chairman of the advisory council of IATF, Hakainde Hichilema (Zambia), Lazarus Chakwera (Malawi) and Emmerson Mnangagwa (Zimbabwe).

Hussein Mwinyi representing Samia Suluhu Hassan (Tanzania), and Edouard Ngirente (Rwandan prime minister) attended the event representing Paul Kagame.

Ramaphosa, president of the Republic of South Africa, declared in his keynote address that South Africa is ready to work with other African countries to drive more balanced, equitable and fair-trade relations for the benefit of the continent.

“This Trade Fair is about building bridges. It is about connecting countries. It is about connecting people as well. Now Africa is taking concrete steps to write its own economic success story and this Intra-African Trade Fair is part of that story. Africa is opening up new fields of opportunity” he asserted. Ramaphosa also wants to see more made in Africa labels, as “this is critical if we are to change the distorted trade relationship that exists between African countries and the rest of the world. We can no longer have a situation where Africa exports raw materials and imports finished goods with those materials. By promoting trade in Africa, we strengthen our own industrial base and produce goods for ourselves and for each other.”

Buhari, president of the Federal Republic of Nigeria, says, “Today is a great day for Africa as we start our collaborative journey towards collective economic prosperity. We cannot achieve this goal by talking alone. The implementation, the difficult journey and the challenges are surmountable if both public and private sectors collaborate. On the public sector side, governments must support local entrepreneurs to build scale, and therefore improve productivity.”