When vehicle assembly points were started in several African states back in the 60’s and 70’s, anxiety engulfed the economic circles. Warranted expectations thrived. African economies were seen bracing themselves up for a worthwhile duel whose outcome would have been hard to predict. First there were issues to do with technical capacity. Majority of Africans were not adequately equipped to man such installations and sustain production. Iron ores to be converted to steel was also a challenge as only a few countries had sufficient deposits. These included South Africa, Mauritania, Algeria, Zimbabwe, and morocco. The final menacing problem was posed by the power requirements for running these industries.
Current industrial status
More than half a century later, this sector has registered remarkable success and a matching measure of setbacks as well. For instance, all the major multinational automobile companies have set up assemblies in Africa. Major notables include general motors, Mercedes Benz, Toyota, Volkswagen, among others. It is worthy to take a note of the inroads being made by Chinese automobile firms to the African market in the recent past too. Cherry Automobile has plans in progress of setting up a plant in Kenya by the year 2013. Sales for products assembled in Africa have registered steady growth over the years, thus generating more income and benefits for the government and the locals. In South Africa for instance, the sector earns about 10% of the GDP, while providing direct employment to around 36 000 people. Among the countries where these assemblies are up and running include South Africa-the African leader, Kenya, Egypt, and morocco.
As aforementioned, this industry has not escaped environmental wrath. It has suffered enough challenges in its quest to take foothold in the African economies. Among the biggest challenges has been lack of market and competition from second hand imports from Asia. These imports account for close to 65% of the African market. During the last decade, there was a significant decline in the number of new cars sold in Africa due to this competition.
The problem of pollution can also not be wished away. These industries have contributed a big deal to climate change in Africa. Indeed we will quite literally have to fight fires emanating from these industries soon, in the name of famine and droughts.
Possible solutions are within……
Now, to deal with this unforgiving issue of unhealthy competition, these African firms should start implementing measures tight and drastic enough to save their dwindling market chances. And the probable measures can include:
- Strict criteria to be administered while effecting second hand vehicle imports
- Governments providing incentives to aid in rooting the local assembly industries
- Incentives for exporters to encourage manufacturers to boost operations in the region
Starting to manufacture vehicles in Africa was a high hurdle for governments and economies to handle. Sustaining it is even harder. Of chances, opportunities and success, only time, diligence and competence will tell.