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Ford, U.S. Based Car Company Eyes Africa For Expansion

With an ever growing consumer and middle class, people throughout Africa are earning more spending power and love for brand products. Ford seeing the huge market potential, is increasing its investment and presence in Africa. Africa is the last untapped big market for major corporations and Ford has announced 17 new vehicles designed for sub-Saharan Africa. The models, all to be introduced by 2016, draw on Ford’s car heritage and global vehicle architectures deigned for the African consumer in mind.

“Middle East and Africa is the final frontier for global automotive growth,” said Ford’s regional chief Jim Benintende. According to Ford’s projections, car sales are expected to grow by 40% in the coming decade in the region. Ford isn’t the only car manufacturer looking to expand in Africa. PSA Peugeot Citroen, which is French based, reopened closed planet in Nigeria. Chinese brands are also increasing their presence . GM, Toyota, Nissan, and Mercedes-Benz have all over the years paid more attention, increased investment in Africa, after seeing all it’s potential. Ford is making sure that they aren’t left in the slow lane trying to catch up with the competition.

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Johannesburg International Motor Show 2011

Johannesburg recently held its annual motor show. The show (also popularly known as the Joburg Motor Show) is the single largest international automotive event in Southern Africa.  The exhibition (held once every two years) runs in conjunction with two additional shows ‘Auto Shop’ and the ‘Johannesburg Truck Show’ which collectively offer a complete representation of the motor industry, serving Sub Saharan Africa and South Africa as host country. This event takes place at the MTN Johannesburg Expo Centre, Nasrec, Johannesburg, and is a comprehensive automotive lifestyle show case.

Here is a video promo of the event

The African car industry is poised for growth as more people move up the social economic class.  The new consumers throughout the continent are a bright spot for car companies such as Mercedes Benz, Nissan, Ford and General Motors.

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Mercedes-Benz to invest $290 million in South Africa

Germany’s Mercedes-Benz plans to invest and open manufacturing plant in South Africa to tap growing African market.

Mercedes-Benz South Africa (MBSA), a unit of Daimler AG DAIGn.DE, plans to invest 2 billion rand ($290 million) to produce the next generation Mercedes-Benz C-Class models to be introduced to global markets in 2014.

The German automaker said in a statement on Tuesday the investment would be used to expand the technical capacity of its South African plant in East London to 65,000 units.

“Daimler AG is delighted to include South Africa among the four manufacturing locations around the world to build the next-generation C-Class,” said Wolfgang Bernhard, a member of Daimler AG’s board of management.

The new models will be built at Mercedes-Benz’s plant in East London, and will also be produced in China, Germany and the United States.

Daimler AG has invested more than 5 billion rand in South Africa over the past 10 years.

“In the first quarter of next year, we should reach the half-a-million mark of C-Class vehicles produced locally since 1994, which marked the model’s start of production in South Africa,” Hansgeorg Niefer, CEO of MBSA, said in a statement.

Mercedes-Benz said the investment was a vote of confidence in the local operations.

In September, General Motors (GM) GM.UL said it planned to invest 1 billion rand in South Africa over the next two years as it builds up its export business in sub-Saharan Africa.

This new investment comes on the heels of General Motors restructuring its African operations to solidify its position on the continent.  The more competition, the better for Africa in the long run, especially from global brands like General Motors and  Mercedes-Benz.

General Motors Restructures Africa Operations

With ever-growing markets and consumers, General Motors has reorganized its African operations to capitalize on the expanding opportunities that the continent has.

General Motors announced today the restructuring of its business in Africa to capitalize on growing opportunities across the continent. Effective January 1, 2011, GM’s operations in Africa will be split into two sub-regions.

GM North Africa will include Libya, Algeria, Tunisia, Morocco, Western Sahara and Mauritania. These countries will be integrated with GM Egypt under the leadership of GM Egypt President and Managing Director Rajeev Chaba.

GM Sub-Saharan Africa will include other countries on the continent. They will be integrated with GM South Africa under the leadership of GM Africa President and Managing Director Edgar Lourencon.

“Africa’s emerging markets offer tremendous long-term potential for General Motors,” said Tim Lee, President of GM International Operations (GMIO). “Our new business structure will align our growing business in Africa with the rest of GMIO and provide better visibility for the continent within our entire company.”

Lee added, “By fully leveraging our existing structure as well as our global resources to focus on each individual market, we look forward to growing and strengthening GM’s business across Africa.”

In the first 10 months of 2010, GM’s sales in Africa (including Egypt and Israel) rose 15 percent on an annual basis to 146,000 units, giving it 12.9 percent of the market. GM’s two largest country markets on the continent, Egypt and South Africa, accounted for more than 70 percent of the company’s sales in Africa.

Chevrolet is GM’s primary brand across Africa. A range of popular Chevrolet models are offered, including the Aveo small sedan, Cruze compact sedan and T Series pickup.

This presents African nations with a good chance to gain a foot in global manufacturing, which is more than a $1 trillion-dollar world-wide industry. The opportunity is bright for global car brands since African nations are growing economically, consumer spending is on the rise and the demographics favor long-term consistent growth.  An investment worthwhile.

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