Expect greater car manufacturer cooperation between Africa and Europe
22 February 2022
A memorandum of understanding (MoU) has been signed by 12 automotive associations in Africa and Europe to develop the former’s vehicular industry. A focal point of the agreement is integration, with greater emphasis on the continent linking up with global and European value chains.
Signatories of the agreement included the African Association of Automotive Manufacturers (AAAM), the European Automobile Manufacturers’ Association (ACEA), the European Association of Automotive Suppliers (CLEPA), the German Association of the Automotive Industry (VDA), and the German – African Business Association.
A sustainable car-manufacturing process
Signed virtually at this year’s EU-Africa Business Forum in the presence of the European Commission, the new MoU between African and European car-manufacturer associations encourages growth. The launch of the African Continental Free Trade Area (AfCFTA) was a key contributor to its creation, alongside efforts by the AAAM, VDA and the German – African Business Association. The MoU now has the support of nine other signatories, as well as the African Union and the European Union.
The declaration sets out key priorities for the continued development of Africa’s automotive industry. This includes the use of sustainable energy resources and propulsion systems, digital mobility solutions, as well as local supply and value chains in the car-manufacturing process. The signatories see the expansion of Africa’s automotive industry as a joint project, giving the process greater sustainability.
A joint effort
The AAM recognises that while the automotive sector is often associated with several challenges, it is nevertheless, key to Africa’s industrialisation. This underlines the importance of developing a Pan-African Auto Pact (PAAP), which promises to bolster and diversify trade, taking its new-vehicle market from one to five million units.
‘The trade and investment climate in Africa can only be improved together,’ commented Dave Coffey, CEO of the AAAM. ‘We are convinced that Africa has great potential to develop a promising automotive industry that will provide long-term employment. The fact that African and European associations have agreed on key points to further develop the industry on the continent is an important milestone.’
This MoU is not only an important step for the African automotive industry but the wider global market. For associations like the VDA, this agreement has been an opportunity to strengthen existing ties. Its partnership with the AAAM already garnered support from the German Federal Ministry for Economic Cooperation and Development since the end of 2020.
VDA members in Africa operate over 80 production sites and make up a significant proportion of the industry’s development. The aim is for the association’s members, no matter their location, to engage in market growth, creating win-win situations in trade and investment links between Europe and Africa.
‘We see the partnership with the AAAM and the signing of the declaration of intent as an important step forward in the ongoing support that our members provide with their activities in Africa. The African continent is severely fragmented, but it will become ever more important with regard to alternative powertrains and can play a pioneering role in this context,’ stressed VDA president Hildegard Müller.