In the latest episode of Connecting Africa, CNN International’s Eleni Giokos hits the road to talk about cars and explores the value chains driving transformation in Africa’s auto industry.
In 2019, over 387,000 cars were exported out of South Africa. Giokos visits Port Elizabeth, recently renamed Gqeberha, to see where many of these vehicles are exported to.
As well as having a thriving port, this part of South Africa is also home to Isuzu, known for its iconic pick-up trucks. Billy Tom, CEO and Managing Director, Isuzu Motors South Africa, describes how the automotive industry can grow across the continent, “You can’t just treat Africa as one country. You’ve got to look at the economic clusters. You’ve got SADC (Southern African Development Community) where South Africa operates, you’ve got East Africa, you’ve got West Africa. Your approach needs to be by economic cluster, where you go into the economic cluster, do a lot of developmental work, and then grow your scale.”
Tom is the first Black person to hold this executive role within the company. He speaks about what this means to him, “Being the first Black CEO, you become the poster child for this. But what poster child do you want to be? Because you also want to create and position yourself so that people become more aspirational in moving and fulfilling the roles going forward.”
Another global player that has a long-standing relationship with Africa is Toyota. The company first arrived in South Africa in the early 1960s and its presence on the continent has increased ever since. Andrew Kirby, the CEO and President of Toyota South Africa, describes how the company has coped during the coronavirus pandemic, “We saw a big drop in 2020 because of the pandemic and then a nice big increase. So, we’ll year produce more than we did in 2019. And we’re seeing some moderate growths. Our biggest volume is in Europe. So that’s by far our biggest volume of exports and we’re seeing good opportunities for growth there, as well.”
Kirby explains that the manufacturing and assembly processes use locally-sourced products including sheet metal for the chassis and steel for the body, “The majority of the parts in this vehicle are all procured here in South Africa. So, it’s a massive economic value proposition by sourcing all of these parts from local suppliers.”
While Volkswagen has been in South Africa for the last 70 years, the programme joins Serge Kamuhinda, CEO, Volkswagen Mobility Solutions, in the company’s ‘test kitchen’ in Rwanda to see how electric vehicles are being trialled on the continent.
Still in its infancy, Volkswagen’s fleet of electric cars in Rwanda is small. But Kamuhinda believes that when the company and the country came together it was a perfect meeting of minds, “Rwanda being a country that is forward looking, wanting to be a test for Africa, a country where you can do a test for business models that can be rolled out across Africa, and Volkswagen being an innovative company wanting to shape the future of mobility. So, when these two strategic minds met there was really a joint vision.”
Kamuhinda tells Giokos that while Volkswagen is keen to pitch itself as a green motor company, there is still work to be done before electric cars become widespread on the continent, “Selling e-vehicles in Africa is still a work in progress, the reason why we started using e-vehicles in the mobility fleet was to understand. To understand the charging patterns and the tropical conditions and to understand also which type of EV is best for the African continent.”
In Egypt, Giokos meets with Ahmed Fikry Adbel Wahab, Managing Director, East Port Said Development Company. His company is trying to develop for the purpose of export, planning to serve the local market, the African market, and beyond, “We expect that as Africa grows there will be opportunities for further development in the automotive sector, specially linking automotive hubs between Morocco, South Africa and Egypt.”
As the automobile industry continues to grow across the continent, Wahab believes it will have a beneficial effect for many other economic sectors. He tells Giokos, “The automotive industry has a mix of trade and skills incorporated within the vehicle. You will see within it cables and wires, you will see the chemical industry, the glass industry, the textile industry. So, a good development of the automotive industry is the locomotive of development of other industries. I’m very bullish on the development of this industry to develop industry in Africa at large.”
With a rich history in South Africa, and newer developments across other countries, Africa’s automobile industry is accelerating across the continent. Mikel Mabasa, CEO of NAAMSA (National Association of Automobile Manufacturers of South Africa) believes the future of the sector is bright, “I think Africa is the new home of the automotive industry. And we are very convinced that we are certainly going to look at Africa as the future of the automotive industry.”