Last week, Japanese automaker, Nissan Motor Co., Ltd., signed a joint venture agreement with Groupe Hasnaoui, a private partner in Algeria to build a car assembly plant that will cost a total of $160 million. The plant will be located near the northwestern city of Oran and will have the capacity to build 63,500 passenger cars and light commercial vehicles annually.
According to Peyman Kargar, Nissan’s senior vice president and chairman of operations in Africa, the Middle East and India, production is billed to start in the half of 2020 and will give employment to 1800 people. It will also support dealers and many more in the supply chain.
“Nissan will bring new models and innovative technology to meet the growing expectations of customers in Algeria. Working with Groupe Hasnaoui, we already have a strong heritage of excellent products and service in the country. Using our Japanese engineering expertise, we will build a manufacturing hub and work to develop the supplier industry,” said Peyman Kargar.
As part of its commitment to Africa and its 2022 midterm plan, the Japanese automaker is growing its presence on the continent, expanding industrial operations into new markets country by country. First in South Africa, Nigeria, Egypt, then Kenya and Ghana in 2018, and now Algeria. With the new plant in Algeria, Nissan’s total potential capacity in Africa will increase to about 200,000 vehicles.
“We are committed to Africa. This commitment is underpinned by the deep realization that you cannot have one solution for an entire continent of 54 different countries, but rather need to get as close as possible to your customers and your distributors,” said Jim Dando, Nissan Group of Africa head of sales and operations.
In general, foreign automakers have been aggressively investing in Africa in the last year. This is due to an increase in consumer demands, policy reforms to reduce the influx of second-hand cars into Africa, and more significantly, most nation’s bid to diversify and grow their economies. As nations are working to wean themselves off their dependence on natural resource, governments are eagerly partnering with these automakers to help build modern industries.
Here is a list of auto plants established in Africa in the last 12 months and those in the works:
Isuzu in South Africa
In February 2018, Japanese automaker Isuzu launched a manufacturing plant in Struandale Port Elizabeth. The plant was the first commercial and light commercial vehicle manufacturing operation outside of Japan without a joint venture partnership. The company is present in Kenya with a 57.7 percent majority shareholding in its truck and bus assembly plant and also has a 20 percent shareholding in joint venture manufacturing operations in Egypt.
Volkswagen in Rwanda, Ethiopia, Nigeria, and Ghana
Volkswagen opened Rwanda’s first car plant and rolled off the country’s first domestically built car in Kigali last June with a plan to reach annual production capacity of 5,000 cars in the first phase. The $20 million investment, had the potential of creating up to 1,000 jobs and promoting inclusivity with women holding managerial positions. At launch, President Paul Kagame said the plant “undoubtedly represents a new chapter in Rwanda’s journey of economic transformation.”
Last month, Volkswagen signed a memorandum(MOU) of understanding with the Ethiopian government on collaborating and delivering a joint vision for the establishment of a motor industry in the country. This collaboration was first announced in Addis Ababa last August by Gerd Muller, German Development Cooperation Minister.
During Chancellor Angela Merkel’s visit to Africa last August, Volkswagen signed an MOU with the Ghanaian and Nigerian government to begin the construction of an assembly plant in both countries. For Ghana, the stated goal is to explore the development of new mobility solutions. For Nigeria, the automaker committed itself to expand automaking operations on a step-by-step basis to turn the country into an automotive hub on the western coast of Africa over the long term.
In July 2018, Chinese automaker BAIC Group opened an assembly plant in the Coega Industrial Development Zone in Port Elizabeth and unveiled the first BAIC vehicle to be assembled in Africa. The facility was an R11bn joint venture between BAIC International and the International Development Corporation to assemble vehicles for the South African market and markets across Africa, with BAIC owning a 65 percent stake.