German automakers set their sights on Africa. More and more people and few new cars. German manufacturers hope to be able to sell many cars in Africa in the future. Until then, there are some challenges to overcome.
Regarding cars, Africa is only a very small and insignificant market compared to China. But that is no reason to ignore the region, according to the German Association of the Automotive Industry (VDA). China was also once very insignificant for car manufacturers. Today, on the other hand, if you want to be successful, you have to sell primarily in China.
German manufacturers want to invest in Africa
Africa continues to experience high growth rates and car markets are not as saturated as in industrialized countries. Additionally, more and more people are living in cities, which also increases the need for transportation. At first glance, the potential for car manufacturers seems enormous. Currently, only 44 out of every 1,000 Africans own a car. By comparison, in Europe the figure is 602, and in the USA as many as 830.
Photo Courtesy dw.com
African car manufacturers are unknown in Europe
In Kenya, Mobius Motors produces rugged SUVs for local demand. In Uganda, Kiira Motors was established in 2014. It is 96 percent owned by the government, with the remainder owned by Makerere University in Kampala. So far, it has a solar bus, an electric car and a hybrid car on offer.
In Nigeria, the manufacturer Innoson Vehicle Manufacturing (IVM) is located in Nigeria, and in Ghana, Kantanka Automobile was founded in 1998. Kantanka's concept is comparable to the Innoson concept in Nigeria. The company sources prefabricated parts from China.
Foreign support needed
Economist Robert Kappel of the University of Leipzig considers that it is very difficult to establish one's own automotive production. Cooperation partners, engineers and sales structures are needed. The expert considers that it would make sense for Africa to follow China's example, i.e. to set up joint ventures with foreign companies.
"Wherever possible, we are working together with Africans, both in sales and with suppliers, and we also strive to expand this intensively," says Kurt-Christian Scheel of the German Association of the Automotive Industry.
