Africa challenges SA’s manufacturing dominance

New opportunities are
opening up in Africa
outside of South
Africa for
logistics
companies
supporting
the motor
industry as
manufacturing
returns to the
continent.
Nigeria,
Kenya and
Morocco are
firmly on the grid in
the race to become
manufacturing
hubs rather than
simply importers
of used and new
cars.
This has clear
implications for the South
African motor industry,
which will have to work
hard to rebuild confidence
after production was
stopped for
nearly two
months by
strike action.
At the same
time it creates
opportunities for
South African
companies
with
automotive
logistics expertise.
Most recently Nissan
and its West African
conglomerate, Stallion
Group, announced plans to
increase vehicle assembly
in Nigeria.
Stallion currently
produces commercial
vehicles in Nigeria, and
capacity will be increased
to 45 000 cars, light duty
trucks, pickups and vans
a year.
Capacity at the plant
will also be opened to
Nissan’s Alliance partner
Renault, according to the
companies.
“Nissan is preparing to
make Nigeria a significant
manufacturing hub in
Africa,” said Nissan
president and CEO,
Carlos Ghosn at the
announcement of the
plans.
In Kenya, a start-up
auto firm that is offering
US$6 000 cars designed
for African roads has
started assembling
at the Kenya Vehicle
Manufacturers (KVM)
based in Thika, central
Kenya.
At US$6 000, the car is
cheaper than a four-yearold
second-hand Toyota
which sells for around
$10 000 in Kenya, and
new models that cost
upwards of $23 000.
Currently, over 35% of
the vehicle’s cost is sourced
domestically and Mobius
Motors is looking to grow
local content beyond 40%.
Chinese assemblers
are also showing interest
in Kenyan assembly,
which is supported
by a combination of
manufacturing incentives
and import tariffs. Chery
Automobile and Beiqi
Foton Motors are both
reported to be planning
assembly plants.