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	The African continent has a low motorisation rate of only 44 vehicles per 1 000 inhabitants.
	Africa’s automotive imports are worth about US$48 billion; while exports are worth only US$11 billion.
	By 2015, approximately 1.55 million new vehicles were sold or registered across Africa.
	Estimates predict that Africa’s passenger vehicle sales could reach up to 10 million units per annum within the next 15 years.
	South Africa, Egypt, Algeria and Morocco are countries with established and rapidly developing automotive industries.

Automotive

Africa continues to position itself as a vehicle OEM and vehicle component assembly platform for the global automobile industry. Despite a low motorization rate on the continent of only 44 vehicles per 1 000 inhabitants, the sector has significant potential. The global average in terms of motorization rate is 180 vehicles per 1 000 inhabitants, and Africa’s rate remains lower than other developing regions such as Latin America (176) and Developing Asia, Oceania and the Middle East (79). By 2015, approximately 1.55 million new vehicles were sold or registered across Africa. South Africa, Egypt, Algeria, and Morocco – all countries with established and rapidly developing automotive industries – together accounted for more than 80% of total new vehicle sales in 2015. Based on recent sales trends, some sources estimate that Africa’s passenger vehicle sales could reach up to 10 million units per annum within the next 15 years.

Between 2005 and 2015, registrations and sales of new vehicles (passenger and commercial combined) increased by a compound annual growth rate (CAGR) of 3.6% on the continent. While coming from a low base and although slightly higher than the global average of 3.5%, total sales growth in Africa was significantly slower than other emerging regions such as Asia and the Middle East (8.9%), and Latin America (4.2%). Both the lower motorization rate to date and new vehicle sales and registrations reflect the still relatively low purchasing power of African consumers relative to their emerging market peers.

Based on market research, there is significant potential in the used vehicle segment of the automobile market. In countries such as Ethiopia, Kenya, Nigeria at least 8 out of 10 imported vehicles are used vehicles. This is a common trend across the region given that Africa imports four times more automotive products than it exports. Recent figures show that Africa’s automotive imports are worth about US$48 billion; while exports are worth only US$11 billion. Key sources of used vehicles are the United States (US), Europe and Japan. The Middle East serves as a notable transit route for vehicles into East Africa.

South Africa dominates automotive trade on the continent, accounting for three-quarters of Africa’s automotive exports and 15% of imports. These figures are inclusive of commercial and passenger vehicles and exclude motorbikes.

In Africa, Kenya, South Africa, Egypt, Morocco, and Algeria have sizeable automotive assembly and manufacturing sectors. Domestic vehicle production and assembly may have substantial multiplier effects for African economies and could act as a driver for industrialisation and economic diversification. This has positioned the automotive industry as an attractive option for policymakers as it can boost local manufacturing, reduce unemployment as well as diversify export revenue sources.

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Roughly 85% of new cars sold in Africa are purchased in South Africa and seventeen of the major global automotive and truck manufacturers have production facilities in South Africa. This places South Africa at the top of the list. Egypt is the second largest automotive market in Africa and produces over 70,000 automobiles per year. Nigeria has established a ten-year duty exemption and tax holiday for any OEM that sets up a local assembly plant in Nigeria.