13. Africa’s Automobile Sector—Development Opportunities in a Rapidly Changing Industry

The chapter delves into Africa's peripheral yet burgeoning role in the global automotive industry, which accounts for just 1.3% of the global vehicle market and production. It explores the continent's vast potential for growth, driven by population expansion and economic development, amidst rapid technological changes and shifting global production landscapes. Key questions addressed include strategies for pursuing global, regional, and domestic markets, the impact of electrification on automobile manufacturing and the battery industry, and the opportunities presented by multimodal transport solutions. The analysis reveals that while Africa's automotive production is currently concentrated in Morocco, South Africa, and Egypt, the continent's market potential is substantial, with 50 million adults projected to afford new vehicles by 2035. The chapter also examines the challenges posed by the dominance of pre-owned vehicle imports and the need for economic stability and governance reforms to capitalize on global recovery and improved commodity prices. It discusses the implications of regional integration through the African Continental Free Trade Area (AfCFTA) and the potential for Africa to leverage its resource wealth in the battery value chain. Additionally, the chapter highlights the emergence of innovative mobility solutions and the role of urban conglomerations in supporting advanced mobility services. The transition to New Energy Vehicles (NEVs) and the development of two-wheeler markets are also explored, along with the opportunities and challenges in battery production and mobility-as-a-service (MaaS) models. The conclusion underscores the need for tailored automotive industrial policies to exploit the various economic development opportunities arising in a rapidly transforming global industry.