Stronger partnerships across the continent could determine whether Africa’s automotive industry delivers the jobs, trade and industrial growth its citizens are counting on. That was the central message from South Africa at the Africa Automotive Investment Forum, held at the Rixos Hotel Alamein in Egypt and hosted by Afreximbank on the margins of the inaugural Alamein Africa Forum.
Minister of Trade, Industry and Competition Parks Tau told delegates that governments, financiers, vehicle manufacturers, suppliers and investors need to work together to develop bankable projects, strengthen regional value chains and increase investment in automotive manufacturing. The goal, he stressed, is to turn Africa’s automotive ambitions into practical investment projects, manufacturing capacity and sustainable economic opportunities, rather than leaving them as aspirations on paper.
The stakes for ordinary Africans are considerable. The continent currently produces approximately 1.23 million vehicles a year, a modest 1.3% of global production. South Africa produced approximately 618,077 vehicles in 2025, while Morocco reported reaching one million vehicles in production in December 2025. Together, the two countries accounted for more than 91% of Africa’s vehicle production, underscoring how concentrated the industry remains.
“Africa still accounts for a small share of global automotive production, but the continent has strong foundations to build on,” the Minister said.
The African Continental Free Trade Area (AfCFTA) featured prominently in his address as a tool to expand intra-African trade and support industrial development. Practical backing is on the way through the AfCFTA Automotive Fund, supported by Afreximbank’s US$1 billion facility for local content development, which is expected to strengthen local production and supplier networks. Afreximbank, headquartered in Egypt, is a multilateral financial institution established to facilitate, promote and expand both intra-African and extra-African trade.
Longer term, continental ambitions point to increasing Africa’s vehicle production to between four million and five million vehicles by 2035, including new energy vehicles and related components. Achieving that would mean a far larger share of the value chain, and the employment that comes with it, staying on the continent.
A structured pact with Egypt
Tau also outlined a proposal for an Automotive Pact between the Southern African Customs Union (SACU) and Egypt, known as a SACU-Egypt Auto Pact. He noted that the concept of automotive pacts within Africa has been under consideration for some time, including work undertaken by the African Association of Automotive Manufacturers (AAAM), and that industry has long argued for Africa to build a viable and competitive automotive manufacturing sector.
Leading automotive economies on the continent, he said, will need to cooperate in a more structured way through industrial and trade arrangements that promote complementarities rather than fragmentation. Within SACU, this thinking has informed consideration of possible automotive pacts with key African partners, including Egypt and Algeria.
The proposal for these Industrial Participation Agreements (IPAs) was presented to SACU structures as part of broader discussions on regional industrialisation, value chain development, and strategic responses to changes in the global trading environment. SACU has noted the increasing importance of developing resilient African production systems in light of heightened protectionism, supply chain vulnerabilities, and growing market access uncertainty in traditional markets.
“Against this backdrop, SACU sees value in exploring structured partnerships with major African economies such as Egypt to strengthen developmental integration and expand intra-African trade,” he explained.
According to the Minister, such a pact offers several benefits: it would support economies of scale in production and trade; encourage complementary production patterns rather than duplication of small-scale production of similar competing models in separate markets; increase intra-Africa trade in new vehicles and components; facilitate trade diversion towards African suppliers where commercially viable; and create a viable basis for supplier development and feeder industry growth.
Domestic plans and outward investment
At home, the South African Automotive Master Plan 2035 sees government and industry working together to expand production, deepen local content, increase participation by black-owned and women-owned firms, strengthen supplier capability and use regional markets as a springboard for sustained industrial growth. The country is seeking investment across the full automotive value chain, including vehicle assembly for passenger vehicles, light commercial vehicles, buses and trucks.
South African firms, Tau added, are also ready to invest outward into African markets in assembly, components, dealerships, after-sales services, logistics, charging infrastructure, battery value chains, industrial park development and supplier partnerships.
Egypt, he said, is a particularly important partner because it is one of the continent’s largest and most diversified economies, with substantial industrial capacity, a large domestic market, and a strong geographic position linking Africa, the Middle East and Europe.
Minister Tau is part of President Cyril Ramaphosa’s delegation to the 8th African Union Mid-Year Coordination Meeting, where the President is set to lead the Southern African Development Community’s participation on Sunday.