African Automotive Industry: A sector with high potential for economic integration
Africa can play a greater role in the automotive sector, where sales of electric cars will continue to grow.
All that is needed is for the continent to set up industries to process its vast mineral resources. In particular, bauxite, cobalt, manganese, and lithium are essential to this industry. Specifically in 3 value chains, namely batteries, bodywork and tires, identified by the study carried out by the employers’ association (CGEM) and financed by the AfDB (see www.leconomiste.com).
In the battery sector, which accounts for 35-50% of the cost of manufacturing an electric car, Africa has an enormous potential. Two focus areas are proposed here: processing and adding value to African mining resources, and developing mid-stream and downstream activities. Development should also involve joint-venture investments in cell manufacturing and battery pack assembly plants, and in shared battery recycling facilities to avoid polluting the ecosystems. These plants will have to develop joint R&D programs to create new batteries and/or improve their production processes. These plants will have to develop joint R&D programs to create new batteries and/or improve their production processes.
Another economic integration value chain identified by the CGEM study is the bodywork industry, which also has great potential.
To boost this value chain in the automotive sector, a single approach is proposed, namely developing bodywork manufacturing. This will involve joint-venture investments and the strengthening of bauxite refining capacities to support the development of bodywork manufacturing units. Added to this is the strengthening of knowledge transfer and experience sharing in each link of the chain, for the development of new product ranges and the creation of new plants.
In the tires industry, too, Africa has good potential for economic integration. The CGEM study suggests investing in two areas. Firstly, the enhancement of natural resources through investments in natural rubber harvesting units and the improvement of agricultural road infrastructure; and joint-venture investments in units for processing and adding value to African natural rubber. Secondly, the development of downstream activities in the value chain through joint-venture investments in tire manufacturing plants, as well as the transfer of knowledge from countries with technical expertise in tire manufacturing.
Aziz DIOUF
