Automotive: Morocco is still the African market leader in the passenger car segment, ahead of South Africa

#Morocco : According to the International Organization of Motor Vehicle Manufacturers (OICA), around one million vehicles were produced in Africa in 2021. South Africa and Morocco supply more than 90% of this production and the Kingdom remains the continent’s leading car producer.

Despite the effects of the announcement and the inauguration of small assembly units in some African countries, automobile production in Africa is not taking off. According to the International Organization of Motor Vehicle Manufacturers (OICA), for the 2021 financial year, Africa’s share is 80.14 million vehicles, which are largely dominated by Asians (46.73 million units), with 39 automobile manufacturers producing worldwide only 931,056 units, which corresponds to a market share of 1.16%.

This means that Africa, despite accounting for 17% of the world’s population, hardly features on the world automotive scene except for two countries: South Africa and Morocco. In fact, according to OICA data, these two countries will produce almost all the vehicles built in Africa in 2021, a year that, although marked by the health crisis that has weighed on certain small manufacturers on the continent, in particular due to the obstacles linked to health restrictions.
Still, the four African countries listed by the organization — South Africa, Morocco, Egypt and Algeria — produced a total of 931,056 units, according to OICA data.

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South Africa is the leading vehicle manufacturer on the continent with 499,087 units assembled in 2021, compared to 447,213 units in 2020 and 631,921 units in 2019. A decrease mainly explained by the impact of the Covid-19 pandemic over the past two years which has impacted the South African automotive sector. The country most affected by the pandemic on the African continent.

In detail, South African production consists of 239,267 passenger car units and 259,820 commercial and industrial vehicles.

South Africa, which hosted its first car assembly line in 1924, has many branches of majors in the global car manufacturing sector. The country has a dozen manufacturers including BMW, Chrysler, General Motors, Fiat, Ford, Toyota, Volkswagen, Mercedes-Benz, Isuzu, Renault-Nissan, Man, Tata, DAF Trucks, FAW, …

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However, the local South African production, which has been affected by the pandemic in the last two years, suffers from several evils: power cuts, economic crisis, competition from small assembly units in Africa (Ghana, Nigeria, Namibia, Rwanda, …) , distance to important markets ( United States, Europe,..),…

South Africa is followed by Morocco with 403,007 units produced in 2021, a 23% volume increase over the previous year. In detail, Moroccan production includes 338,339 passenger cars and 64,668 commercial vehicles. The kingdom thus largely retained its position as the African leader in the construction of private vehicles, ahead of South Africa (239,267 units). Leading in this segment since 2017, the gap in passenger car production is set to widen further with the increase in production at the PSA plant. It suffered from the health crisis related to the Covid-19 pandemic, which hit the global automotive sector.

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However, unlike South Africa, Morocco has only two established global automakers. These are the French concerns Renault in Tangier and PSA in Kenitra. The Renault Tanger plant in Melloussa is Africa’s largest car factory, with a capacity of 340,000 units per year. With the Renault units in Tangier and Casablanca (Somaca) and the PSA unit in Kenitra, Morocco has an installed production capacity of more than 650,000 units per year.

The Moroccan automotive industry enjoys many advantages: the existence of an automotive ecosystem with more than 350 equipment manufacturers, suppliers and subcontractors, the geographical proximity to the European market, the existence of professional training centers, political and economic stability, the existence of high-quality infrastructure (Tangier Med port, railway , highways, etc.), tax incentives and benefits for investors, etc.

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For the coming years, the Moroccan authorities aim to reach 1 million units produced on Moroccan soil by recruiting new manufacturers. Toyota, Hyundai, Ford, Volkswagen and Chinese manufacturers are being targeted.

Far behind South Africa and Morocco, the other African automakers are still dwarfs, even if many countries on the continent are willing to integrate the industry.

This puts Egypt in 3rd place among the continent’s car manufacturers according to the International Organization of Motor Vehicle Manufacturers, albeit with a low production of only 23,754 vehicles produced in 2021. However, many manufacturers are established in the country: BMW, General Motors, JAC , PSA, Deawoo, Ford, … And the country has about twenty assembly plants with a cumulative annual production capacity of 300,000 units and around 300 automotive component suppliers and subcontractors. However, car production does not follow.

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The country is not realizing its enormous potential. Several automotive construction projects have been announced in recent years. In 2019, Japanese company Nissan and automaker El Nasr Automotive Manufacturing signed an agreement aiming to produce 100,000 vehicles per year. In 2021, El Nasr also announced large-scale production of electric vehicles starting in August 2022 in partnership with Chinese company Dongfeng Motors Corporation. This unit is scheduled to launch in August 2022 with an initial production of 50,000 units per year. These vehicles are intended to gradually replace conventional taxis in large cities and reduce environmental pollution.

Finally, for Algeria, automobile production in 2021 was only 5,208 units. A lot alone that goes to show the fiasco of the country’s auto industry, which has all but ground to a halt since late 2019.

Several car assembly plants were closed (Volkswagen Kia etc.) due to a lack of import options for car kits. Others are standing still because of the arrest of their mentors, who have been detained in connection with the trials of oligarchs close to the former Bouteflika regime.

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As a result, production, which had reached 180,000 units in 2018, fell to 60,012 units in 2019 and 754 units in 2020, before increasing to 5,208 units in 2021, under the impact of the policies of the leaders who put an end to the Assembly masquerade with imported car kits. In fact, some auto assemblers imported fully assembled cars, sometimes just missing the wheels, to be assembled in Algeria and therefore with no local added value. Only since the end of 2019 has no credible alternative been offered to car assembly. And all units will be stopped except for those of Renault Production Algérie, which is currently working in slowed down mode.

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Besides these 4 countries, Nigeria, Ghana, Kenya, Rwanda, Namibia, Côte d’Ivoire etc. have started automobile assembly. Production remains insignificant globally. The health crisis has had a major impact on the sector. However, Nigerian production could increase sharply starting this year with the entry of Aliko Dangote, Africa’s richest man, into the auto assembly sector.

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