Greater Integration in the African Automotive Industry - U.S.-Africa Business Summit

Greater Integration in the African Automotive IndustryFriday, July 22, 2022On Friday, July 22, 2022, the Corporate Council on Africa hosted a panel on “Greater Integration in the African Automotive Industry.” The panel was moderated by Rabia El Alama, managing director of American Chamber of Commerce Morocco, who focused on enhancing the currently minimal role played by Africa in the global automotive industry; less than 1% of cars produced annually are made in Africa, with existing production focused almost entirely in South Africa and Morocco.The panel began with the Honorable Alan Kyerematen, Minister for Trade and Industry of the Republic of Ghana, speaking on measures to limit the import of used cars. He trumpeted its contribution to Ghana’s success in developing a national automotive industry, which could serve to catalyze the creation of an increasingly-advanced economy with a skilled workforce. Ghana has been successful in attracting seven key automakers to the country as a result of measures to enhance production capacity, production quality, and Ghana’s international competitiveness. Mr. Kyerematen also spoke on the importance of the African Continental Free Trade Area (AfCFTA), which would allow more components to be sourced from other African nations, taking advantage of Africa’s vast ownership of minerals and resources while enhancing African regional integration in the production of each vehicle. He ended his remarks with the advice that it is not sustainable for every African country to produce vehicles and that some should focus on integrating into regional supply chains by making components.Mohamed Bachiri, CEO of Renault Maroc, highlighted his company’s $7 billion in exports from Morocco. In 2013 Renault’s factory in Tangiers became its third largest globally; Renault aims to have the capacity to produce 1 million cars per year in Morocco by 2030, having had a footprint in the country since 1928. Mr. Bachiri attributed the success of Renault in Morocco to government initiative, with commercial infrastructure, such as rail links and ports, proving crucial to linking Morocco to global auto markets. He also highlighted the importance on public-private partnerships, with increasingly advanced training for engineers and technicians positioning Morocco well to take part in the Fourth Industrial Revolution, which will lead to more demand for technologically complex cars.Juan Carlos Gonzalez, Senior Purchasing Manager for Spain and Emerging Markets at Ford Motor Company, highlighted Ford’s $1 billion investment in South Africa, the company’s largest ever investment, and its 2015 expansion into Morocco. He highlighted the importance of Morocco as a logistics and manufacturing hub for supplying Ford’s plant in Valencia. Mr. Gonzalez also touted Ford’s commitment to carbon neutral by 2050. Already, 35% of its electric power use in South Africa is derived from solar sources and the company is investing heavily in carbon-free production. He also highlighted Ford’s work in recycling plastics used in auto manufacturing.This panel was held as part of CCA’s U.S.-Africa Business Summit, held in Marrakesh under the high patronage of His Majesty King Mohammed VI of Morocco. The 2022 Summit had the theme “Building Forward Together” and explored a renewed commitment by both public and private stakeholders to building stronger U.S. and Africa trade, investment, and commercial ties as they both emerge from unprecedented health and economic challenges.Click Hereto view the session recording.