Africa Automotive Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Africa Automotive Market is segmented by Vehicle Type (Passenger Vehicles and Commercial Vehicles) and Country(South Africa, Morocco, Algeria, Egypt, Nigeria, Ghana, Kenya, Rest of Africa). The report offers market size and forecast for all the above segments in value (in USD Billion).

Market Snapshot

African automotive market Overview
Study Period: 2018-2027
Base Year: 2021
CAGR: 5.55 %

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Market Overview

The African automotive market was valued at USD 28.45 billion in 2020, and it is expected to reach USD 39.87 billion by 2026, registering a CAGR of 5.55% over the forecast period.

However, the outbreak of the pandemic, COVID-19, impacted the market very badly, and the majority of markets in the region have not recovered, and the demand is still lagging behind the pre-COVID levels.

The demand for new vehicles across the African region has increased until 2018. During 2019, due to a slowdown in the economy, the sales of new vehicles decreased by 4% to 1.17 million units, as compared to 1.22 million units in 2018. Passenger cars accounted for 73.81%, while commercial vehicles accounted for 26.18%.

Although there was a decline in the overall sales of new vehicles, commercial vehicles in 2019 increased by 0.33% to 308,319 units as compared to 307,301 units sold in 2018. Furthermore, in 2020, Egypt witnessed an increase in new vehicle sales by 26.55% to 231,238 units in 2020 compared to 182,713 units sold in 2019.

The African market has one of the highest growth prospects across the world. Multinational vehicle manufacturers currently setting up production plants in Angola, Ethiopia, Ghana, Kenya, Namibia, Nigeria, Rwanda, South Africa, and other countries are a clear indicator that there is potential to boost manufacturing for the automotive market in this region. South Africa, Egypt, Morocco, and Algeria have sizeable automotive assembly and manufacturing sectors.

Scope of the Report

The Africa Automotive Market is segmented by vehicle type and country.

By Vehicle Type, the market is segmented as Passenger Vehicles and Commercial Vehicles.

and by Country, the market is segmented as South Africa, Morocco, Algeria, Egypt, Nigeria, Ghana, Kenya, Rest of Africa.

Vehicle Type
Passenger Vehicles
Commercial Vehicles
Country
South Africa
Morocco
Algeria
Egypt
Nigeria
Ghana
Kenya
Rest of Africa

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Key Market Trends

Growing Economy and Government Initiatives are Expected to Help the Automotive Industry

The African market has high growth prospects. For a continent with 1 billion inhabitants, it only occupies 1% of the global new car sales. Also, 85% of the total new cars are sold in South Africa itself. The sub-Saharan region, where there is a potential for up to 3-4 million cars from the existing number of around 425,000, is expected to offer high returns to players who are willing to enter the region seriously.

After the formation of the Association of African Automotive Manufacturers (AAAM), companies are expected to benefit from reforms and policies. For instance, any car company that sets up a local assembly plant in Nigeria, Kenya, and Ghana, could get tax holidays of up to 10 years and duty exemptions.

The level of infrastructure is also increasing in Africa, which is likely to aid the region's automotive market. Western and Northern Africa is expected to drive the growth till 2023, where countries like Ghana and Morocco are expected to be the key players.

Ghana aims to become a developed country by 2030, and even if the target is met halfway, the Ghanaian automotive market is anticipated to grow at a tremendous pace, as the economic growth is directly proportional to the growth of automotive markets.

Morocco’s integration into the global economy was facilitated by the signing of numerous free trade agreements with the European Union and the United States. These trade agreements contributed positively toward the emergence of export activities in the country.

Also, the country developed an investment cluster program, which saw Renault enter the local market. Renault will be the only global automaker assembling vehicles in the country until the arrival of Peugeot in 2019.

Africa Automotive Industry Outlook

South Africa is Expected to be the Largest Automotive Industry in the Continent

The South African automotive industry is the largest in the region. However, during the year 2019, it witnessed a slight downfall in sales figures. During the year 2019, 355,378 units were sold as compared to 365,242 units in the year 2018, which is a fall of around 2.7%. Similarly, the commercial vehicle segment in the country witnessed a downfall of around 3.07% and registered sales of 181,233 units of commercial vehicle sales in the year 2019. In 2020, according to the National Association of Automobile Manufacturers of South Africa, vehicle sales in the country declined by 29.1%, which is because of the pandemic COVID-19.

The country is a hub for exports of passenger cars in several other parts of the world, especially Europe. Export sales recorded a second consecutive month of solid growth in January 2021 and at 22,771 units reflected an increase of 6,468 units, or 39,7%, compared to the 16,303 vehicles exported in January 2020. Several major OEMs from all over the world are investing in the country, for instance,

  • In April 2019, Ford announced that Ford Motor Company of Southern Africa (FMCSA) is expanding its vehicle export operations by adopting a multi-port strategy with the first shipment of 1,000 locally assembled Ford Rangers from Port Elizabeth to markets in Europe.
  • In April 2019, Nissan announced that it is investing a ZAR 3 billion in its facility in Rosslyn, Pretoria, to produce the next generation Nissan Navara pickup.

However, increased competition from the used vehicle market and weak domestic demand, which is further compounded by constrained household finances (even with low-interest rates) and high unemployment, are major concerns for the automotive industry in the country. Yet, with the aforementioned trends and developments, it is expected that the market studied will experience growth during the forecast period.

Africa Automotive Industry Outlook_Key Market Trend2

Competitive Landscape

The African automotive market is dominated by manufacturers such as Volkswagen AG, Toyota Motor Corporation, Groupe Renault (including Dacia Sales), Daimler AG, Ford Motor Company, Hyundai Motor Company, and Isuzu Motors, among others.

Manufacturers are focusing on strategies to improve their business across the region. For instance:

  • In June 2020, Nissan Africa, Middle East, and India (AMI) presented a comprehensive four-year strategy for the region under the company's Global Transformation Plan. The plan aligns with the global direction of rationalization, prioritization, and the focus to bring core models and technologies to a region that accounts for around 10% of the world automotive market.

Recent Developments

  • In November 2021, Toyota South Africa announced that the new Corolla Cross Hybrid compact SUV model will be produced in South Africa, after Toyota made a commitment of R2.43 billion investments earlier last year.
  • In November 2021, Volkswagen South Africa launches the second phase of its EV strategy. The second phase of Volkswagen’s strategy will see the introduction of an all-electric ID.4 test fleet in 2022.
  • In October 2021, Nissan Motor Company announced strategy to make its Rosslyn plant in Pretoria the light commercial vehicle (LCV) hub for its Africa operations is gaining further impetus, with the assembly of semi-knocked-down kits of the new Navara pickup scheduled to commence in Ghana early next year.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Drivers

    2. 4.2 Market Restraints

    3. 4.3 Industry Attractiveness - Porter's Five Forces Analysis

      1. 4.3.1 Threat of New Entrants

      2. 4.3.2 Bargaining Power of Buyers/Consumers

      3. 4.3.3 Bargaining Power of Suppliers

      4. 4.3.4 Threat of Substitute Products

      5. 4.3.5 Intensity of Competitive Rivalry

  5. 5. MARKET SEGMENTATION

    1. 5.1 Vehicle Type

      1. 5.1.1 Passenger Vehicles

      2. 5.1.2 Commercial Vehicles

    2. 5.2 Country

      1. 5.2.1 South Africa

      2. 5.2.2 Morocco

      3. 5.2.3 Algeria

      4. 5.2.4 Egypt

      5. 5.2.5 Nigeria

      6. 5.2.6 Ghana

      7. 5.2.7 Kenya

      8. 5.2.8 Rest of Africa

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Vendor Market Share

    2. 6.2 Company Profiles*

      1. 6.2.1 Daimler AG

      2. 6.2.2 Fiat

      3. 6.2.3 Volkswagen AG

      4. 6.2.4 Toyota

      5. 6.2.5 Ford

      6. 6.2.6 Groupe PSA

      7. 6.2.7 Mahindra

      8. 6.2.8 Nissan

      9. 6.2.9 Renault

      10. 6.2.10 Tata Motors

      11. 6.2.11 Innoson Vehicle Manufacturing Company

  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

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Frequently Asked Questions

The Africa Automotive Market market is studied from 2018 - 2026.

The Africa Automotive Market is growing at a CAGR of 5.55% over the next 5 years.

The Africa Automotive Market is valued at 28 Billion USD in 2018.

The Africa Automotive Market is valued at 39 Billion USD in 2026.

Volkswagen AG, Toyota, Daimler AG, Groupe Renault, Hyundai Motor Company are the major companies operating in Africa Automotive Market.

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