Importance of Africa to UAE re-export market grows
Greater numbers of re-exported auto parts from UAE head for Africa
The African market is expected to account for a growing proportion of the UAE’s re-exported auto parts market during the coming years.
Automotive Africa – Mega Trends, a white paper produced by Frost & Sullivan, states that Nigeria, Angola, Congo Republic, and other North African countries such as Libya, are gaining in importance as markets for re-exported parts from the UAE. These countries currently account for between 30% and 35% of total exports from the UAE, whereas in three to four years, the report predicts that the market share for the African region will rise to 45% to 50%.
The white paper highlights a number of other key trends likely to impact the future growth of the African continent and its automotive industry. The market shows significant potential for growth owing to the 21.6 million passenger vehicles that are currently operational across the continent.
“On the back of double-digit growth of demand in key Sub-Saharan countries, the value of Africa’s auto parts market is likely to double by 2020,” commented Subhash Joshi, industry manager at Frost & Sullivan for automotive and transportation practice in the Middle East, North Africa, and South Asia.
“Countries such as Nigeria, Kenya, Uganda, and Ghana have witnessed double-digit growth in demand of parts in the last five years,” he added.
The report points out that owing to foreign investment, especially from China, increasing numbers of vehicles are being developed specifically for African terrains. Even so, the paper reveals that European and American auto brands are most popular in North Africa, whilst Japanese and Korean manufacturers occupy the top spots across West and Sub-Saharan Africa.
Local parts production is limited to a selection of North African countries such as Algeria, Egypt, and Morocco. Although aftermarket is experiencing growth in the continent, competition between manufacturers and importers of new vehicles is also intensifying.
Automotive brands are taking direct action to grow their presence across the regions in anticipation of market growth. Honda, for example, is setting up a West African office in Nigeria. Importers, meanwhile, such as UAE-headquartered Al-Futtaim Group, are also making moves in the African market.