After our road-trip in Asia, On'Air takes you to Africa, to discover the automotive challenges from 2019 to 2050!
In Africa, the vehicle market is fragmented. And economic growth is uneven, depending on the country: flourishing in Ghana and Ethiopia, yet in recession in Southern Sudan.
In sub-saharan Africa, a region of 40 countries, only 100 000 vehicles were sold in 2017.
For Charles Dovonou, Regional Strategic Product Manager at Groupe Renault, this situation is explained by three factors:
There you have it: the vehicle industry in a part of this region is still in its infancy, but that could soon change...
Faced with these challenges, the countries of the African Union are bringing inthe reforms needed to promote the growth of the car beginning with restrictions on used vehicle imports.
But without second-hand vehicles in a region that is dependent on them, how will people get about? The answer seems obvious : they’ll have to manufacture new vehicles!
To achieve this, the African Union, to which most countries on the continent belong, is developing an economic union to tear down customs barriers between the member countries. This project, known as the African Continental Free Trade Area (ACFTA) is designed primarily to promote inter-country trade and should change the landscape for the automotive industry.
Thanks to this project, in the future,
1. Car companies will be able
to set up easily in sub-Saharan Africa countries
2. It will create jobs &
encourage economic development
3. It will be easier to sell cars
with the abolition of import duties
4. It will enable wider access to
new vehicles for all
With its presence in South Africa, Algeria, Egypt and Morocco, Groupe Renault is the leading automotive group on the continent of Africa and enjoys a strong image. In North Africa, the plants in Tangiers and Oran are in constant operation and are a guarantee of our presence.
market share in Africa
Today, the ambition is to continue this development in the countries of sub-Saharan Africa. Especially in Nigeria. Announced in July, the partnership with local group Coscharis will allow the production and distribution of vehicles in the country. In October, production of the Renault Logan and Duster began at the Coscharis factory in Lagos, and the Group’s dealer network will be selling the Renault Duster Oroch and Kwid on this key market.
As the foundation stone of an ambitious project, Groupe Renault’s presence in Nigeria is bound to lead to similar partnerships to take advantage of opportunities in the ACFTA. With our knowledge of these countries and our determination to offer appropriate vehicles, there will be no lack of opportunities.
But we must be realistic. "The infrastructures in some of these countries are still not up to scratch, says Charles Dovonou. The countries have invested, but the climate and maintenance conditions lead to rapid deterioration and require new investments that are hard to sustain".
Similarly, there is scarcely any public transport in the majority of countries on the continent. "People get about on two wheels", he says. "Where they do use public transport, we are talking about overcrowded vehicles with no safety standards". The development of mobility requires improved travel conditions, particularly given the urbanisation that Africa is experiencing.
We are also seeing the gradual emergence of a solid middle class.
It is comprised, amongst others, of former expats, who have studied abroad and are ready to commit to their countries. They are part of the emergence of a new mobility for Africa, that needs the reliability of a new vehicle. But this transformation isn’t always happening smoothly.
In November 2018, Romain Kouakou, the General Director of Road Transport and Traffic for Ivory Coast, speaking at the Forum Smart City du Grand Paris, reminded the audience that the emergence of the middle class in his country had led to a considerable increase in the number of vehicles on the road, despite an inadequate infrastructure that lacks quality, resulting in an estimated annual loss of 400 million euros. Whilst mobility is still under development in many parts of Africa, other sectors are thriving and could entail African automotive development.
In some countries, the appearance of the smartphone has revolutionised habits and economic development. Have you heard of M-Pesa, for example? M, as in mobile, and Pesa, which means money in Swahili, is a microfinance system based on the mobile phone that requires no bank account. It was introduced in Kenya in 2007 and revolutionised the retail landscape in this region and now has its imitators. Charles Dovonou tells us about the strength of these local undertakings. "Mobile payment systems, like M-Pesa, Orange Money and MTN Money have 350 million users across the continent, and the numbers are growing all the time, thanks to the ubiquitous smartphone. These companies understand the mentality and the culture of these countries and, sooner or later, we ought to expect this disruption to turn the vehicle scene in Africa upside down".
(French speaking - english subtitle available)
Instead of an industrial revolution, Africa is undergoing a revolution in services, in particulier via technology. Rwanda, for example, is becoming a technology hub. Kigali is also in charge of a study group that has brought together a number of cities for a project known as "Smart Cities & Communities".
To support this change, some countries have already begun to develop their own smart cities, which should become centres of excellence in profitable sectors. One of the main projects is based in Kenya: Konza Technology city. Located at a short distance from the capital, Nairobi, it will house a research campus, incubators and start-ups. Digital giants such as Google and IBM are already there. And other countries are following the same path, like Benin with its Sèmè City. Smart installations that will push Africa to the forefront of the international scene, and that will map out its future, between innovation and reality.