African grey vehicle imports constitute over 80 percent

…As continents auto sales drops 28% on Covid-19

The Covid-19 pandemic has wreaked havoc on new-vehicle sales in Africa, which are expected to drop from 1.16-million units in 2019, to a current forecast of 830,000 units this year, says Dave Coffey, chief executive officer, African Association of Automotive Manufacturers (AAAM) at its event and Deloitte Africa Automotive Forum event.

Reacting on the development, the AAAM chief executive said, “This is a 28 percent reduction, which is quite significant. However, the market will recover, and we believe that new-vehicle sales on the continent can increase to five-million units per year in the medium term.”

Coffey says second-hand and grey vehicle imports constitute more than 80 percent of vehicle sales in Africa. He stated that with an effective auto ecosystem, this can be reduced to an acceptable ratio that enables integrated auto manufacturing, whilst ensuring the safety of the consumer without major disruption to the existing used-car market.

“Ultimately all second-hand vehicles should come from vehicles that were assembled on the continent, or that were imported as new vehicles, as part of an automotive programme’’.

Coffey says the automotive industry plays a disproportionately small role in manufacturing Africa. In 2019, new-vehicles sales in Africa represented 1.3 percent of global demand, while Africa has 17.2 percent of the world’s population.

He pointed out that, the economic benefits of having a fully-fledged integrated auto manufacturing sector are considerable and requires advanced manufacturing technologies, while it also creates a deep value chain and skilled employment.

The significant growth to five-million vehicles sold in Africa requires the implementation of effective automotive policy that would serve as the core focus of the AAAM.

The AAAM is actively promoting the rollout of vehicle manufacturing value-chains in Africa, which requires intervention from governments to curb illegal, grey and second-hand imports, as well as the drafting of policies to support local vehicle and parts assembly.

Tochukwu Nwosu