Africa emerging as car making hub

Morocco is an emerging automotive manufacturing hub, while South Africa has a history of car making. But multinational vehicle manufacturers are also setting up production plants in Angola, Ethiopia, Ghana, Kenya, Namibia, Nigeria and Rwanda and locally owned African producers are starting out on this road less traveled.

Africa has more than a billion people, 17% of the world’s population, but accounts for only 1% of cars sold worldwide, compared with China’s 30%, Europe’s 22% and North America’s 17%, according to the Paris-based Organisation Internationale des Constructeurs d’Automobiles (OICA). Africa has on average 44 vehicles per 1,000 people, compared with the global average of 180 and 800 in the US, according to McKinsey.

Morocco and South Africa lead the way In 2018, Morocco overtook South Africa as the biggest African exporter of passenger cars with exports in 2019 at $10 billion (€8.5bn). The two countries mainly make cars for foreign markets, but also have relatively large domestic markets. VW, Mercedes-Benz owner Daimler and BMW are among the biggest car companies in Africa, making up over 90% of all passenger cars produced and a third of the cars sold in South Africa in 2019. Meanwhile, about 80% of the 400,000 cars produced in Morocco are sold to Europe, with France, Spain, Germany and Italy the main destinations. The Moroccan car industry directly employs 220,000 people, most of whom work for 250 suppliers. Annually, Moroccans buy 160,000 new cars, which is a small number for a population of 36 million. In September, Stellantis — created in January 2021 after a merger of Fiat Chrysler and PSA — announced that its supermini electric car Opel Rocks-e would be produced at the PSA plant in Kenitra, with a capacity to make 200,000 vehicles a year. Stellantis, the world”s fourth-largest car manufacturer, plans to increase spending on parts made in Morocco from €600 million to €3 billion by 2025.

BYD, a Chinese electric vehicle manufacturer, signed a memorandum of understanding with the Moroccan government to open a plant also in Kenitra, while Hyundai, the Korean carmaker, after leaving Algeria, is reportedly considering setting up in Morocco. Meanwhile, STMicroelectronics, a US company based in Casablanca, has just launched manufacturing of the main transmitter for Tesla vehicles in Morocco.

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