Industry Trend Analysis - Autos Investment Round-Up: South Africa Remains Preferred Investment Destination - MAR 2018
BMI View : With two out of the four announced projects in our latest investment round-up taking place in South Africa, the country continues to retain its position as SSA ' s preferred autos manufacturing base for carmakers looking to tap both domestic and international markets.
In BMI's regular round-up of production investments, we track the latest projects from the production side of the industry and analyse regional trends that we see developing. In doing so, we hope to build a picture of any potential hubs that may be developing, as well as company strategy in terms of production bases and export programmes.
|Date Announced||Country||City/State/Region||Company||Value||Brief Description||Date Onstream|
|TBC = to be confirmed; na = not available. Source: BMI|
|Nov-17||South Africa||Rosslyn||Eicher Motors||na||Investment into domestic truck assembly||2018|
|Nov-17||Nigeria||Lagos||CFAO Group||na||Partnership with Mitsubishi Fuso Truck and Bus Corporation to assemble 500 units of the Fuso Canter truck annually||2017|
|Nov-17||Ethiopia||TBC||Energy Co-Invest Corp||na||Set up electric vehicle assembly and inductive charging stations||TBC|
|Nov-17||South Africa||Silverton||Ford Motor Company||USD220mn (ZAR3.0bn)||Increase production capacity of the Ford Ranger pick-up truck||2018|
In BMI's latest investment round-up of countries in the Sub-Saharan Africa (SSA) region, we have identified four new investment projects that were either announced or inaugurated in Q417, down from the six projects identified for the same period in 2016. While the majority of investments are lacking financial details, clear trends are evident in the nature of the projects, including the enduring appeal of South Africa as a production base.
South Africa Preferred Investment Destination
With two of the four projects in our latest investment round-up situated in South Africa, it is clear that the country is a preferred destination for automakers looking to tap both the local and export markets, which builds on the trend that we saw in last quarter's round-up ( see ' South Africa Still Relevant To Regional Expansion ' , October 16 2017). This trend is further bolstered by Ford's commitment to investing USD220mn (ZAR3bn) to expand its production capacity as it seeks to meet growing local and international demand for its Ranger pick-up truck. In addition, Indian automaker Eicher Motors' decision to assemble trucks in South Africa highlights the growing diversity of the local autos industry.
EV Investment Too Soon For Ethiopia
The trend for investment into relatively unusual production locations continues this quarter with Energy Co-Invest Corp's plan to assemble electric vehicles (EVs) in Ethiopia. While this investment adds to the potential for Ethiopia to become a regional EV manufacturing hub in the future, affordability issues as well as the country's erratic electricity supply will mean this project will face considerable challenges getting off the ground ( see ' Affordability And Infrastructure Threaten EV Plans ' , November 22 2017).