Title: The last frontier: prospects and policies for the automotive industry in Africa

Authors: Anthony Black; Thomas McLennan

Addresses: School of Economics, University of Cape Town, Private Bag X3, Rondebosch, 7701, South Africa ' School of Economics, University of Cape Town, Private Bag X3, Rondebosch, 7701, South Africa

Abstract: Since the turn of the century, sub-Saharan Africa (SSA) has grown very rapidly and the expansion of the middle class is evident in the surge of demand for vehicles albeit from a very low base. The first part of the article quantifies the rapid growth in vehicle sales, which is being met mainly by imports, especially of used cars. Outside of South Africa, domestic production is minimal and the article goes on to consider the question of whether and how the region can begin to meet this booming demand by developing its own industry. The level of industrialisation in most parts of SSA is low and manufacturing capabilities are limited. Nevertheless, a number of the larger countries, for example Nigeria and Kenya, are putting policies in place to encourage domestic production. Small scale investments in assembly are underway. To make the most of this opportunity, African countries will need to adopt appropriate policies and also accelerate the process of regional integration to allow for sufficient market scale.

Keywords: automotive manufacturing; automobile industry; sub-Saharan Africa; SSA; vehicle trade; industrialisation; industrial policy; vehicle markets; vehicle sales; imports; used cars; domestic production; regional integration.

DOI: 10.1504/IJATM.2016.079232

International Journal of Automotive Technology and Management, 2016 Vol.16 No.2, pp.193 - 220

Received: 04 Dec 2015
Accepted: 24 Feb 2016

Published online: 22 Sep 2016 *

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