The automotive industry in Africa, though short of real capital investment, is one of the fastest growing sectors on the continent. Unsurprisingly, in view of the lack of general investment in this sector (as in many manufacturing activities across the continent), the automotive industry is largely dominated by imports from abroad, and particularly from Europe and America. South Africa apart, African countries generally engage in very little vehicle assembly to meet the ever-growing local demand.

Comparing the current automotive industry in Nigeria to that of Korea, Obi Akwe, a Nigerian mechanical engineer explains: "About three decades ago, Korea knew nothing about car production. In fact, the very nature of the sort of economic activities and system of governance did not permit that kind of economic activity." According to Akwe, it is the resilience and determination of the people of Korea that has made them so important in the global automotive market today.

However, Akwe laments the current subsistence level of the industry in his own country: "Nigeria has long been involved in the car market in Africa. Our Peugeot assembly plant is one of the success stories in the automotive industry. But at the time that we should have been playing a more

influential role in the market, we are struggling to even keep the many people employed by the company in employment. The story is that the company is at its knees." Indeed, the sad state of many of the companies in the automotive industry in Nigeria has caused the government to seek investments from both local and foreign players.

South Africa apart, African countries engage in little vehicle assembly to meet the ever-growing local demand

The Bureau for Public Enterprises (BPE) invited expressions of interest from local and international investors for stakes of up to 35 per cent in three automobile plants, namely Anambra Motor Manufacturing Company (Enugu), Peugeot Automobile Nigeria Ltd (Kaduna) and Volkswagen Nigeria Ltd. (Lagos). The plants are joint ventures with Daimler Benz, Peugeot and Volkswagen, respectively, and were commissioned in the 1970s. However, to date, the majority of automobile plants in Nigeria have been poorly managed. In order to pre-qualify, investors will be expected to prove their expertise in this sector.

In stark contrast to the situation in Nigeria, South Africa has made significant progress in the automotive industry with an increase in sales over the past year. According to the National Association of Automobile Manufacturers of South Africa, new vehicles sales for March show an increase of 11.1 per cent compared to the same month last year.

NAAMSA feel that this increase has been "reasonably encouraging" and that it is broadly in line with what the industry expected. Yet NAAMSA also noted that "the year on year comparison had to be qualified in the context of the relatively weak sales

performance during March last year, by which time the pre-emptive buying spree to avoid the price increases resulting from the weak rand at the time, had largely dissipated.

However NAAMSA maintains that in general the signs are positive: "it was encouraging that 2003 first quarter aggregate new vehicle sales remained marginally ahead of the first quarter 2002 industry sales." NAAMSA also note that, "The ongoing remarkable strength in sales of heavy commercial vehicles and buses confirmed continued positive investment sentiment in the economy."

World motor production, which showed an increase of 4.7 per cent last year, was also expected to decline by 1.5 per cent this year. Many analysts are also of the view that with special initiatives like the African Growth and Opportunity Act (AGOA), automotive manufacturing companies based in Africa stand to gain more from special concessions allowed under the initiative.

According to Assistant U.S. Trade Representative (USTR) for Africa Rosa Whitaker as a result of AGOA "an Ohio company recently won a contract to supply equipment to a major automobile manufacturer in South Africa" and, in turn, South African automobile makers exported a wide range of vehicles worth US $120 million to America last year, which makes transportation the largest sector in AGOA. Whitaker underlined the positive affects: "This has been a very positive and unexpected development of AGOA, which has helped to diversify our trade relationship with Africa."

Nonetheless, vehicle exports globally have already declined by 3.9 per cent in the first two months of the year. And according to NAAMSA, the industry's export performance for the rest of the year is dependent on the global economy. An impending Toyota export contract to