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Germany deepens ties with Africa on automotive industry development

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The German Association of the Automotive Industry (VDA), has partnered with the African Association of Automotive Manufacturers (AAAM), as part of the ‘PartnerAfrica’ project of the German Federal Ministry for Economic Cooperation and Development.

The partnership-based cooperation between VDA and AAAM promises to be mutually beneficial, said the AAAM in a statement. It will help the automotive industry to improve access to sometimes difficult markets, even as it is in the interest of German development policy to improve Africa’s local prospects by pulling in the private sector, and to create sustainable jobs and sustainable mobility in partner countries.

AAAM is an automotive association with a pan-African development approach, established in 2015 by global original equipment manufacturers (OEMs, or vehicle manufacturers).

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The VDA-AAAM partnership sees itself as an engine for dynamic growth, high innovation speed and state-of-the-art jobs, says the AAAM. For the VDA, cooperation with Africa focuses on expanding the sustainability agenda beyond products and production to include energy sources, such as e-fuels (fuels from renewable energy) and digital mobility solutions; increasing trade volume and investment; and further opening market access for manufacturers and suppliers.

Equally important is supporting the development of local supply and value chains, and promoting training and employment, the partners said.

“We highly appreciate our partnership with AAAM as the VDA intends to increase its involvement in Africa,” said VDA President, Hildegard Müller.
“With the joint project, VDA and AAAM are pursuing the goal of creating improved conditions for a flourishing automotive industry on the African continent, in order to increase economic growth and welfare in Africa and enable German, as well as African member companies, to participate in market growth and foster win-win trade and investments between Europe and Africa.

“This commitment of the VDA and AAAM is a significant contribution to growth and prosperity in Africa, supported by the investments of car manufacturers and suppliers on this emerging continent.”

An in-house cluster for the partnership at VDA’s headquarters in Berlin, and two offices in South Africa, and Ghana, will be responsible for the project implementation and supporting direct local contacts for members and partners.

According to AAAM, the motorisation rate in Africa is 45 vehicles per 1,000 inhabitants, which is significantly below the global average of 203 vehicles per 1,000 people.

In 2019, the total volume of new vehicles sold in the African market (passenger cars) reached 869,000 vehicles. The untapped demand from Africa is coupled with a steady rise in consumer spending, which has risen over the past few years at a yearly rate of 10 per cent, said AAAM.

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The estimated sales forecast of new light vehicles in Africa is 1.8-million units in 2027. This is a doubling compared with the 2019 volume.

“Our experts estimate that the African new-vehicle market can initially grow to three-million (units) by 2035, with the potential for five-million (units) through the implementation of effective automotive policies and ecosystems,” said AAAM CEO, Dave Coffey.

“We are excited about our partnership with the VDA as it will provide expertise, resources and a strong network that will facilitate the development of the automotive industry in Africa.”He added that Africa has “great potential” as a market and production location for the German automotive industry, in particular.

In 2019, 62,000 passenger cars were exported from Germany to Africa.

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