German automotive sector intensifies links to Africa

By Moses Akaigwe

The German Affiliation of the Automotive Sector (VDA) has joined fingers with the African Affiliation of Automotive Companies (AAAM) as part of the “PartnerAfrica” project of the German Federal Ministry for Financial Cooperation and Progress (BMZ).

The German automotive marketplace sees probable in Africa and strengthens its ties to the continent by way of the AAAM, which is the 1st automotive affiliation with a pan-African strategy, recognized in 2015 by worldwide First Tools Makers (OEMs).

The partnership-centered cooperation amongst VDA and AAAM is mutually advantageous: in cooperation with community and regional structures it aids the automotive market to increase accessibility to often tricky markets and at the exact time it is in the fascination of German enhancement policy to enhance neighborhood potential clients by involving the non-public sector and to build sustainable careers and sustainable mobility in companion nations.

The VDA-AAAM partnership sees by itself as an engine for dynamic progress, substantial innovation pace and condition-of-the-art jobs.

For the VDA, cooperation with Africa focuses on the pursuing priorities: expanding the sustainability tactic outside of solutions and production to include things like strength resources, these as e-fuels, and electronic mobility alternatives.

In addition, strengthening the growth partnership, expanding trade quantity and financial commitment, and further more opening marketplace access for manufacturers and suppliers. Similarly critical is supporting the improvement of regional source and value chains. In addition to stakeholder administration and partnerships, matters this sort of as promoting education and work are also section of the in depth plan.

Hildegard Müller, President of the VDA, said: “We really value our partnership with AAAM as the VDA intends to improve its involvement in Africa. With the joint task, VDA and AAAM are pursuing the intention of generating improved situations for a flourishing automotive sector on the African continent, in buy to improve financial growth and welfare in Africa and permit German as nicely as African member providers to participate in sector progress and foster acquire-gain trade and investments in between Europe and Africa.

“This dedication of the VDA and AAAM is a substantial contribution to progress and prosperity in Africa, supported by the investments of motor vehicle brands and suppliers on this emerging continent.”

An in-home cluster for the association partnership at VDA’s headquarters in Berlin and two challenge offices in South Africa and Ghana are now liable for job implementation and supporting direct area contacts for customers and associates.

Africa has in some nations around the world fast increasing economies with a youthful, increasing inhabitants and rapid fees of urbanization together with extremely reduced charges of motorization. By 2035, the continent is predicted to have the largest labour force prospective in the environment1. The automotive and logistics sector holds a vital position thanks to its sustainable value development in supplier networks, assembly vegetation, distribution constructions and pan-African trade relations. And it features terrific prospective for innovation, advancement and positions. The motorization charge in Africa is just 45 automobiles per 1,000 inhabitants, which is noticeably down below the world regular of 203 per 1,000.

In 2019, the total quantity of new motor vehicles marketed in the African market place (passenger autos) was 869,000 automobiles. Africa has wonderful probable as a market place and manufacturing area for the German automotive market. In 2019, 62,000 passenger cars have been exported from Germany to Africa. 49 p.c of these went to South Africa, the most essential market in Africa.

In 2019, 355,000 passenger cars were being offered in South Africa, with German OEMs accounting for 34 % or 119,000 cars.

Whole passenger motor vehicle output in Africa in 2019 was all around 787,000 models. 44 % of the complete motor vehicle generation in Africa took location with 349,000 units in South Africa. German OEMs have steadily expanded their manufacturing in South Africa in the latest a long time. As opposed to 2010, their creation has increased by 44 % to 317,000 passenger cars and trucks in 2019. This implies that 91 percent of passenger vehicle production in South Africa is carried out by German suppliers.

For the German automotive industry, Africa is becoming a lot more and far more significant not only as an export destination, but also as a area production internet site: In new many years, German automotive companies and suppliers have built growing investments not only in the set up markets of the Mahgreb area and South Africa, but also in foreseeable future markets this sort of as Ghana and Rwanda.

The German automotive business is globally related. With over 2,500 output amenities abroad, German suppliers and suppliers add to growth and prosperity in above 70 international locations close to the entire world. At the very same time, the providers use their know-how to add to sustainable mobility with environmentally helpful systems on site.

The untapped desire from Africa is coupled with a regular increase in buyer paying out, which has risen about the past few several years at an yearly rate of 10 %. The believed sales forecast of new mild cars in Africa will be 1.8 million in 2027. This is a doubling in comparison to the current market volume of 2019. Dave Coffey, CEO of AAAM: “Our industry experts estimate that the African new-car or truck market can in the beginning increase to 3 million by 2035, with the prospective of 5m, by employing efficient automotive guidelines and ecosystems. We are energized about our partnership with the VDA as it will give abilities, resources and a strong network that will aid the development of the automotive market in Africa.”

VDA and AAAM strongly help the industrialization on the African continent by sharing their market know-how, by developing platforms for exchange and by building bridges amongst countries and in between general public and non-public institutions. Also, Africa is predicted to perform an raising role in manufacturing and exporting renewable vitality. As a result, a trusted trade framework amongst Africa and Europe is wanted. Also, in Africa trade relations must be eased and intensified.