African countries need deeper industrial cooperation, investment and regional integration if the continent is to build a more competitive automotive industry capable of generating jobs, strengthening local supply chains and retaining a greater share of value within African economies.
South Africa’s Minister of Trade, Industry and Competition, Parks Tau, made the case for closer collaboration between governments, manufacturers, financiers and suppliers at the Africa Automotive Investment Forum in El Alamein, Egypt, on Friday.
The forum, hosted by Afreximbank on the margins of the inaugural Alamein Africa Forum, brought together public and private-sector stakeholders to examine how the African Continental Free Trade Area (AfCFTA) could support the development of regional automotive value chains.
Tau argued that Africa’s automotive ambitions need to move beyond policy commitments towards commercially viable projects, manufacturing capacity and stronger networks of African suppliers.
The scale of the challenge remains considerable. According to figures cited by the South African government from 2025 production data, Africa produced about 1.23 million vehicles during the year, equivalent to roughly 1.3% of global output. South Africa produced 618,077 vehicles, while Morocco produced 501,965, meaning the two countries accounted for more than 91% of continental production.
The concentration illustrates both the strength of Africa’s established automotive hubs and the uneven distribution of manufacturing capacity across the continent. Rather than treating automotive development as a competition between individual countries, Tau’s argument centred on creating complementary production systems in which different African economies can participate in assembly, components, logistics, materials, technology and services.
One proposal under discussion is an automotive pact between the Southern African Customs Union (SACU) and Egypt. Tau said such an arrangement could encourage economies of scale, increase trade in vehicles and components, and reduce duplication between relatively small production markets.
The proposal remains part of broader discussions within SACU rather than an implemented trade agreement. It envisages greater coordination between southern and northern African automotive industries and potentially stronger links between manufacturers, component producers and feeder industries.
Egypt’s position makes it an important potential partner. Its large domestic market, established industrial base and geographical links between Africa, the Middle East and Europe give it a significant role in any attempt to develop more integrated continental automotive production. Egypt has also introduced an Automotive Industry Development Programme aimed at increasing localisation, supporting feeder industries and attracting investment into automotive manufacturing.
For South Africa, the proposed partnership fits within the country’s longer-term Automotive Masterplan 2035. The strategy seeks to increase vehicle production, raise local content to 60%, double employment across the automotive value chain and deepen participation by historically under-represented businesses.
The South African government has also identified the transition towards new-energy vehicles as an increasingly important part of the industry’s future. That transition creates opportunities beyond conventional vehicle assembly, including batteries, charging infrastructure, electronic components, minerals processing and associated industrial technologies.
At continental level, AfCFTA provides a potential framework for connecting these capabilities across national borders. Afreximbank and the African Association of Automotive Manufacturers have previously identified regional value chains, automotive financing, policy coordination and capacity building as important areas for cooperation.
The financing challenge, however, remains central. Developing automotive industries requires substantial and sustained investment in factories, logistics, skills, energy, technology and supplier development. Afreximbank has positioned financing and industrial development as part of its broader automotive strategy, including support for African companies involved in emerging mobility technologies.
The continental ambition is substantial. African automotive stakeholders have previously discussed raising production to between 3.5 million and five million vehicles annually by 2035. The South African government currently refers to a 4–5 million-vehicle continental objective, including new-energy vehicles and related components. Achieving such an expansion would require considerably greater intra-African trade, stronger supplier networks, reliable infrastructure and access to affordable vehicle finance.
For Africa, the strategic question is therefore not simply how many vehicles can be assembled on the continent. It is whether the expansion of automotive manufacturing can generate deeper African ownership and value addition, create skilled employment, develop indigenous suppliers and connect industrial capabilities across regions.
A more integrated automotive market could allow African countries to build on their respective strengths rather than developing isolated manufacturing ecosystems. The success of such an approach, however, will depend on whether proposed partnerships translate into investment, production and commercially sustainable supply chains.
With the SACU-Egypt proposal now forming part of the discussion, the next phase will be to determine whether continental automotive cooperation can move from policy ambition towards projects that deliver measurable industrial and economic gains across Africa.
