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Automechanika Dubai
19 – 21 October 2020 | DWTC
Automechanika Riyadh
2021
2
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Webinar access – desktop/laptop
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Engagement area – on the right
Replay will be available on: www.automechanikaDubai.com/Webinars
3
Africa’s IAM Markets
Current Situation & Future Potential
4
Presentations by
Panel discussion and Q&A Session
Agenda
5
Automechanika Dubai
19 – 21 October 2020
6
Key Show Highlights:
Competencies:
Truck, motorcycle & agriculture
Academy:
Learning & development area of the show
Modern workshop:
Area for our garage/workshop audience – product demos & trainings
Product focus:
Body & paint
Oils & lubricants
Automechanika Dubai
7
Exhibitors• 87 exhibitors from 13 countries
• 52 exhibitors from 11 countries (Covid-19)
• Country Pavilions: Turkey, USA, South Korea, China, Hong
Kong, Taiwan
Visitors• 2,470 visitors
COVID-19 Effect• Lost 25 exhibitors due to travel restrictions
• Rolled over China, Hong Kong and Taiwan to 2021
New show dates in Q3 2021
Automechanika Riyadh 2020
01/07/2020 8© africon GmbH 2020
The IAM in Africa – Current situation and possible future scenarios
Automechanika Dubai - Webinar
Marc-Peter ZanderPartner & CEO africon GmbH
01/07/2020 9© africon GmbH 2020
Introduction africon
africon is a consulting company with sole focus on Africa. One key sector is automotive.
WHO ISafricon?
A hands on consulting team with extensive african experience
ESTABLISHED
2011
SOLE FOCUS AREA KEY BENEFITS
Reduction in costsReduction in timeReduction in risk
EXPERIENCE
More than
21 yearsof experience in business with Africa.
REPRESENTATION
NigeriaKenyaTanzaniaSouth Africa
AUTOMOTIVE HANDS ON
From day one africon works hands on.
More than
30 projects in
African countries.
OEM (on-highway)
OEM (off-highway)
IAM (on-highway)
IAM (off-highway)
01/07/2020 10© africon GmbH 2020
Poll question 1
Are you already active in Africa and to which extent?
01/07/2020 11© africon GmbH 2020
Population growth – Africa
By 2050 Africa will hold the most world wide population with over 2,4 billion inhabitants.
Sou
rce:
Un
ited
Nat
ion
s(2
01
4)
Development of world´s population(in billion)
0
1
2
3
4
5
6
7
8
9
10
1800 1850 1900 1950 2000 2050
Rest of the world2,9 billion
Developed countries 1 billion
China 1,4 billion
India1,8 billion
Africa 2,4 billion
World population 20106,8 billion
Developed
Developing
Pop
ula
tio
n in
bill
ion
s
World population 20509,5 billion
01/07/2020 12© africon GmbH 2020
Sou
rces
: W
HO
an
d J
HU
(2
02
0),
AH
K (
20
20
)
Current situation (as of June 24)
Corona cases in Africa are relatively low so far – but testing is as well.
Number of confirmed Corona virus cases(total number: 324,524, confirmed deaths: 8,621)
106,000
14.568
58.141
4.848
4.952
21,371
> 20,000
>10,000
>5,000
< 5,000
> 40,000
Corona testing(rate of testing per 1,000 inhabitants)
0
5
10
15
20
25
For comparison: Germany = 62.8India = 5.7
Status: June 2020
01/07/2020 13© africon GmbH 2020
Inte
rnat
ion
al M
on
etar
y Fu
nd
(2
02
0)
IMF: growth forecast 2020
Though lower than required, growth in Africa is still expected to remain in positive territory in 2020.
NG: -3.4%
GH: 1.5%
KE: 1%
ETH: 3.2%
CN: 1.2%
IN: 1.9%
01/07/2020 14© africon GmbH 2020
Opportunities from Corona
Current capacities of production in Kenya are declining.
Production capacities(in percent)
Logistics for spare parts in Kenya(% of respondents)
76% 77% 67%
Challenges in sourcing raw
materials
Outbound logistical
challenges
Increased cost of procuring spare
parts
0
5
10
15
20
25
30
% capacity before COVID-19
% capacity during COVID-19
Most of the companies have around 50% of their production capacity unused since the pandemic. The majority of participants see huge problems in sourcing, procuring and outbound logistics.
01/07/2020 15© africon GmbH 2020
01/07/2020 16© africon GmbH 2020
Luanda, AngolaNairobi, Kenya
This is Africa
The African continent is not only about impressive savannahs but it is also home to astonishing cities and industrialized urban areas.
Sou
rce:
CC
TV A
fric
a (2
01
9),
Go
ogl
e, W
ikip
edia
, G
oo
gle
Imag
es (
20
19
).
Dar es Salaam, Tanzania Lagos, Nigeria
01/07/2020 17© africon GmbH 2020
VIO in Africa
The total of Africa has approx. 52.5m VIO in 2018 which is slightly higher Brazil and Germany.
Sou
rce:
Wo
rld
Ban
k, A
fric
an D
evel
op
men
t B
ank,
CIA
Fac
tbo
ok,
Wo
rld
ban
k, I
HS
52.5mVIO
32.5mVIO
India 19.5mVIO
Indonesia
Germany
272mVIO
USA
43mVIO
47mVIO
Brazil
Total Africa
151mIO
China
225mVIO
VIO worldwide(2017, selected countries and regions)
Note: VIO = Passenger cars and commercial vehicles
01/07/2020 18© africon GmbH 2020
16
26
49
65
90
97
100
110
140
140
145
320
390
510
534
780
800
3,217
0 2000 4000
Rwanda
Gabon
Mauritius
Ethiopia
Uganda
Burkina Faso
Mozambique
Zimbabwe
Angola
Tanzania
Botswana
Senegal
Ghana
Cote d'Ivoire
Kenya
Nigeria
Congo (DRC)
South Africa
43
103
188
200
246
300
340
400
430
500
600
740
830
910
1,100
1,166
6,384
11,720
0 5000 10000 15000
Rwanda
Gabon
Mauritius
Burkina Faso
Botswana
Mozambique
Senegal
Uganda
Cote d'Ivoire
Tanzania
Ethiopia
Angola
Zimbabwe
Ghana
Congo (DRC)
Kenya
South Africa
Nigeria
Overview: Automotive data
Vehicle inflows into Sub Sahara Africa are increasing. Countries are increasingly having sizable fleets.
Sou
rce:
afr
ico
n r
esea
rch
in N
iger
ia, K
enya
an
d T
anza
nia
(2
01
6/1
7),
OIC
A (
20
18
), W
HO
(2
01
6),
afr
ico
n a
nal
ysis
(2
01
8)Vehicles in operation in Sub-Saharan Africa
(2016, in thousand units)
PC CV
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
Kenya Nigeria Ghana Ethiopia
2006 2010 2012 2016 2018 2019
Motor vehicle imports in Sub-Saharan Africa(2006 – 2019) in thousand units
01/07/2020 19© africon GmbH 2020
01/07/2020 20© africon GmbH 2020
News on Africa
01/07/2020 21© africon GmbH 2020
News on Africa
01/07/2020 22© africon GmbH 2020
News on Africa
01/07/2020 23© africon GmbH 2020
Sou
rces
: P
ress
& a
fric
on
res
earc
h (
20
19
)
OEM Focus: Volkswagen
VW positions itself in 7 African markets under its TRANSFORM 2025+ brand strategy.
Ethiopia
Kenya
Rwanda
• MoU signed to set up an assembly plant.• The delegation to Ethiopia was accompanied
by companies such as Bosch and Schaeffler, in an attempt to increase localization of components, introduction of mobility concepts the opening of a training center.
• Inaugurated an automotive production site in Kenya in 2018 but with limited capacity.
• Develops warranty plus a maintenance and service plan. In addition, financing options will be developed together with local banks to provide a needed boost to individual car ownership and Volkswagen’s return to the Kenyan market.
• The plant already rolled out the ever made vehicle.
• Plans to reach annual production of 5,000 cars in the first phase (SKD).
South Africa
• Maximum annual plant capacity is expected to be reached with a 3 shift operation of some 160 000 vehicles, in 2019; of which about 48% is exported to global markets.
Angola
• US $48m investment was announced in 2005 with American partner ANCAR.
• Construction was subject for delays till our day.
• Currently reviving talks with Angola government to set up the plant in the newly set up Luanda-Bengo SEZ.
Nigeria
Ghana
• MoU signed to construct an assembly plant in two phases: SKD (2019) then CKD (2022).
• Set up of a training center.
• MoU signed to expand assembly operations on a step-by-step basis and to turn Nigeria into an automotive hub on the western coast of Africa over the long term.
01/07/2020 24© africon GmbH 2020
Assembly activity - overview
While new vehicle sales declined, used vehicle sales surged in Nigeria.
Sou
rce:
Dra
ft A
uto
mo
tive
Po
licy,
Ken
yan
Go
vern
men
t (2
01
9),
Ken
ya R
even
ue
Au
tho
rity
(2
01
9),
af
rico
n r
esea
rch
(2
01
9)
20 20 2020
50
80100 100 100
2 58 10
1213
149
285 287
397
513
174
221
405
466
38 1237
50
5423 11 18
11
-80
20
120
220
320
420
520
2006 2008 2010 2012 2014 2016 2017 2018 2019
Capacity Actual assembly FBU imports New vehicle sales
Note: Total vehicle inflow based on trade statistics, in which numerous reporting errors were replaced by africon data modelling. 2019 data is an estimate based on Q3 data. No full year data available yet
Vehicle assembly and imports(estimates, in 000 units, PC & CV)
New carsales Q1
2020
- 55,7%
01/07/2020 25© africon GmbH 2020
The Nigerian automotive parts market
The aftermarket in Nigeria is already worth approx. $4.4bn.
Sou
rce:
afr
ico
n e
xper
t an
d d
istr
ibu
tor
inte
rvie
ws
(20
18
), a
fric
on
co
nsu
mer
su
rvey
(2
01
8),
afr
ico
n w
ork
sho
p s
urv
ey
(20
18
), a
fric
on
fle
et o
per
ato
r su
rvey
(2
01
8),
Nig
eria
n v
ehic
le r
egis
trat
ion
dat
abas
e (2
01
8),
afr
ico
n a
nal
ysis
(2
01
8)
Engine parts8% Fuel- and water
pumps2%Other repair parts
10%
Wear parts35%
Service parts45%
Engine parts Fuel- and water pumps Other repair parts Wear parts Service parts
Total:USD 4.4bn
The Nigerian automotive parts market by market segments(2018, in % of USD value)
01/07/2020 26© africon GmbH 2020
Spark plug imports across Africa
There are at least 7 countries in Africa importing more than 1.5m spark plugs per year.
01/07/2020
55
148
199
210
470
685
915
920
947
1,858
2,769
2,833
3,382
5,570
23,500
47,181
Rwanda
Zambia
Ethiopia
Gabon
Côte d'Ivoire
Congo (DRC)
Mozambique
Uganda
Cameroon
Tanzania
Senegal
Ghana
Angola
Kenya
Egypt**
Nigeria
Approx.* spark plug imports( 2016, in thousands of units)
*Note: based on UN Comtrade data, Excl UAE export data (reporting gap)**Egypt data based on research
Sou
rce:
UN
Co
mtr
ade
(20
18
)
NIGGHA
KEN
TZA
AGO
SEN
EGY
1
2
3
4
5
6
7
SA – excluded.
VIO in key countries:1. Nigeria – 12.7m2. Egypt – 6.5m3. Kenya – 1.7m
01/07/2020 27© africon GmbH 2020
Japan, 53%
EU, 9%
Rep. of Korea, 2%
India, 20%
Saudi Arabia, 5%
China, 2%
Others, 10%
EU, 36%
Japan, 25%
Rep. of Korea, 5%
India, 18%
South Africa, 4%
Others, 14%
EU, 73%
Japan, 7%
USA, 5%
UAE, 4%Canada, 4% Others, 8%
EU, 52%
Japan, 1%Rep. of Korea, 1%
USA, 19%
India, 13%
Canada, 7%
Others, 8%
Origin of PCs in operation
Though opportunities exist, markets are very heterogenous.
Sou
rce:
afr
ico
n r
esea
rch
(2
01
8),
UN
Co
mtr
ade
(20
18
)
PCs exported to SSA by origin of exports(2016)
01/07/2020 28© africon GmbH 2020
Company name
Vehicle focusEngine part, fuel- and water pump brands carried
Other IAM parts brands carried
Interest in new IAMPC CV
Ax
B
() …
C() None in automotive
D()
E ()
F
None
G
Sou
rce:
afr
ico
n d
istr
ibu
tor
inte
rvie
ws
(20
18
)
Distributors in Nigeria
Most brands are already represented in African markets. Recently various companies appointed new distributors in Nigeria.
1
2
3
4
5
6
7
Eurostar (CH)
01/07/2020 29© africon GmbH 2020
Sou
rce:
afr
ico
n in
terv
iew
wit
h R
ich
mo
ore
(2
01
8)
Local warehouses
A local warehouse with a distribution partner is key to success.
01/07/2020 30© africon GmbH 2020
Sou
rce:
Mck
inse
y &
co
mp
any’
s “
Afr
ica:
Big
ger
chal
len
ges,
big
ger
op
po
rtu
nit
ies
“ ar
ticl
e (2
01
9)
Disruption in the automotive markets
As the automotive markets disrupt, traditional business models will be declining with 38%.
5.4
3.4
0.1
2.1
+4.3
2015 2030 2030 Total
Disrupted (e.g, e-hailing, L3 - L4 vehicles, algorith-based insurance)
Traditional (e.g, taxis, non-autonomous vehicles, fuel sales)
-2.1
7.7
5.5
38% decline in traditional
revenues coming from disruption
56% of 2030 revenues coming from disrupted
opportunities
Global automotive ecosystem revenues(in $ trillion)
01/07/2020 31© africon GmbH 2020
Sou
rce:
Mck
inse
y &
co
mp
any’
s “
Afr
ica:
Big
ger
chal
len
ges,
big
ger
op
po
rtu
nit
ies
“ ar
ticl
e (2
01
9)
Potentials for the automotive market in Africa
Africa is one of the last markets still providing growth opportunities for more traditional aftermarket business models.
5.4
3.4
0.1
2.1
+4.3
2015 2030 2030 Total
Disrupted (e.g, e-hailing, L3 - L4 vehicles, algorith-based insurance)
Traditional (e,g Taxis, Non-autonomous Vehicles, Fuel sales)
-2.1
7.7
5.5
56% of 2030 revenues coming from disrupted
opportunities
Global automotive ecosystem revenues(in $ trillion)
• Africa will need time to develop a sufficient power network. Until then combustion engines cars will likely dominate in Africa.
• Last mile, broadband internet will take more than 10 years to be distributed within Africa. Traditional cars will still dominate the markets
• Affordability for new cars is still low. Therefore, the continent will still import 2nd hand cars
• New technologies in services concepts will be expensive and difficult to apply in Africa.
1
2
3
4
01/07/2020 32© africon GmbH 2020
Poll question 2
Will the African automotive aftermarkets play an
important role for your business in a post-covid
future?
01/07/2020 33© africon GmbH 2020
What will happen after Covid 19
Covid 19 can offer an opportunity to establish contacts with African companies.
1 LOCAL PRODUCTION WILL RISE IN FUTURE
2
3
4
African governments will further promote local production to reduce the dependency from the imports. This also applies for “easy to produce spare parts”.
AFRICAN COMPANIES WILL WANT MORE DIRECT CONTACTAfrican companies gain in international importance and will seek a direct contact to the OE suppliers instead of trading partners.
MORE TRADING WITHIN AFRICADistribution partners will increase their footprint within Africa to serve the markets locally. Larger orders will be placed to serve the surrounding markets with hubs e.g. Nigeria.
MIDDLE EAST WILL SERVES AS A HUB FOR AFRICATrading through Dubai etc. is very favourable especially with local warehouses. East Africa will continue to be served from ME. West Africa might turn to Europe directly.
5 AFRICA WILL PLAY A MORE VITAL ROLE FOR IAM COMPANIES As Africa's VIO is strongly growing and local laws will reduce the import of used cars there are more opportunities for international IAM companies.
01/07/2020 34© africon GmbH 2020
There are a lot ofchallanges in Africa andwe need to see on howwe can bring European
solutions to Africa.
We do not want Europeanstrying to bring European
solutions. We wantpeople wanting to know
how to do business in Africa!
3501/07/2020 © africon GmbH 2020© africon GmbH 2018
Questions?
Marc-Peter ZanderErik Deitersen
36
37
Thank you for joining us!
Replays will be available on
www.automechanikaDubai.com/Webinars
Follow us @automechanikaDu for all updates
Email us at [email protected]
38
Automechanika Dubai
19 – 21 October 2020 | DWTC
Automechanika Riyadh
2021