South African vehicle and component manufacturers are looking for new markets in Africa due to the scaling-down of sales of internal combustion-powered vehicles in the biggest export market, which is currently Europe. European Union lawmakers and member countries have agreed to ban the sale of new gasoline and diesel cars and vans by 2035 – 13 yea rs away.This is already having an impact on sales. In the first six months of 2022 sales of battery-electric vehicles (EVs) grew by a third year on year, to nearly 650 000 units – or nearly 10% of new car sales in a declining market.In the United Kingdom (South Africa’s biggest market in volume terms) EVs have a 14% share of the new car market. Africa comprised the second-largest export region in 2021 for the SA auto industry, accounting for R34.96 billion, or 16.8% of the country’s total automotive exports of R207.5bn, according to the 2022 Automotive Export Manual.In his summary of the deliberations of the inaugural SA Automotive Week held in October, Dr Robert Cisek, the outgoing managing director at Volkswagen Group South Africa, and chairman of the Automotive Business Council (Naamsa), said “as the European markets become more and more challenging for exports in the future, South Africa needs to put its foot forward in making the African Continental Free Trade Area (AfCFTA) a reality to accelerate and further develop the African market for new vehicles to help drive industrialisation of the continent”.He warned that South Africa could lose its position as the leading African source of automobiles. According to the 2022 Automotive Export Manual, South Africa’s share of African vehicle production fell from 62.1% in 2020 to 53.6% in 2021, despite the fact that production increased from 446 215 to 499 087 units.On the plus side, South Africa rose one position in global vehicle production ranking – from 22nd to 21st, with production share rising from 0.58% to 0.62%.“South Africa needs to embrace the opportunities that the transition to New Energy Vehicles offers well beyond the automotive sector (eg, decentralised solar power generation, charging infrastructure, energy storage solutions),” said Cisek in his summary. “And we have to move quickly as the gap is continuously increasing and other African countries are far more progressive than us in SA.”In his keynote address to the SA Automotive Week, the secretary-general of the AfCFTA, Wamkele Mene, said “the automotive sector is at the heart of Africa’s industrialisation” and can play a vital role in the global electric EV value chain once AfCFTA is enacted. While not all African countries can become vehicle producers, many countries have the potential to supply materials and components.Examples include copper from Zambia and the Democratic Republic of Congo (DRC), seat leather from Ethiopia, and rubber processing in the Ivory Coast and Cameroon. Mene told a Ugandan business forum earlier in October that $1bn had been mobilised by the Afreximbank for the development of the automotive value chain and to support industrialisation on the continent.
