Dragons building cars (Africa Report n°33 – August-Sept 2011)

 

Japanese and Korean giants are seizing local manufacturing opportunities in Africa.

 

The Asian contribution to Africa’s manufacturing sector continues: Toyota Motor Corporation has announced it will buy 50% of local Kenyan bus and car company Associated Vehicle Assemblers (AVA) to build its Hino trucks locally. On the back of strong growth in the Kenyan economy, and a recent government licence for 14-seat buses, Toyota sees opportunity in the commercial travel market.

 

Meanwhile in South Africa, the Korean Trade-Investment Promotion Agency (KOTRA) has been trying to boost trade between the two countries. Currently only one Korean firm, the fibre optiques company M-Tech, runs factories in South Africa. But several others heavyweights are looking to invest, such as the steel firm POSCO, the electronics group LG, and Hankook Tire. These are multi billion rand investments, and high-life growing trend of Asian manufacturing firms looking to both escape wage inflation on their continent, and ambe themselves next to the consumer markets of tomorrow.

South Korea is one of Africa’s top flve trading partners, according to research by the African Development Bank, accounting for 7.2% of Africa’s trade with emergency economies. The South African branch of Japanese carmaker Nissan has also announced that it could begin the production of its buses in South Africa within the next two years.

 

Nicholas Norbrook

 

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