Annual Forum Papers

The last frontier: Prospects and policies for the automotive industry in Africa

  • Year: 2015
  • Organisation: Professsor Anthony Black, Tom McLennan (School of Ecoomics, University of Cape Town)
  • Publication Author(s): Anthony Black; Tom McLennan
  • Countries and Regions: South Africa

Session 1: Regional manufacturing and industrial policy 1

Sub-Saharan Africa (SSA) remains one of the last frontiers for automotive production. This seemed a distant prospect in the lost decades of the 80s and 90s. But since 2000, SSA has been one of the world's fastest growing regions and over the next five years it is predicted that seven out of the 10 fastest growing countries in the world will be in Africa. The rapid growth in the middle class is already evident in the surge of demand for vehicles albeit from a very low base. Much of this demand is being met by imports because outside of South Africa, production is almost non-existent. Imports of light vehicles into SSA (excluding South Africa) grew at 19% per annum from 2000-2013. While such a rapid pace will not be sustained, we forecast that the passenger vehicle market will exceed 10 million units by 2030, which will make it comparable to the projected market in South America. To make the most of this opportunity, African countries will need to adopt appropriate policies and also accelerate the process of regional integration to allow for sufficient market scale.