CAPE TOWN — Just seven months ago, Ford Motor Company announced a glossy new plan to expand its business in the Middle East and Africa. Now, the company—which is the second-largest car manufacturer in the U.S.—is actively searching the African continent for a new factory site.
This news comes hot on the heels of the U.S. Africa Business Forum, which culminated in the announcement that U.S. companies would invest a grand total of $14 billion on the African continent.
There have been rumors that Ford’s new factory site will be in Nigeria, but Ford was clear that its future business in Africa would not be limited to a single country.
“We’re looking at all the opportunities we can see in Africa, and that really spans the whole continent,” a spokesperson for the company said.
Ford sold approximately 200,000 cars in Africa last year. This amounted to nearly 20 percent of the company’s total sales, but Ford is looking to expand its business in Africa even further. To capitalize on the budding African market, Ford will introduce 17 new models in Sub-Saharan Africa over the next two years.
Projections estimate that Africa’s driving-age population will jump from 540 million last year to 840 million by 2023. By and large, this is an untapped market, but Ford is taking notice of the opportunity.
Since 2005, Ford has exported $9 billion in vehicles and car parts out of South Africa, the country where Ford operates its only two factories on the continent. The company has invested $500 million into its South African business over the past four years.
Ford’s venture in Africa has paid dividends. Along with its Middle East operations, Ford reported a pretax profit of $77 million in just the first half of this year.
In South Africa, Ford’s auto sales rose 40 percent last year alone.
But Ford is just one of several American industrial behemoths to join the recent surge in African economic growth.
General Electric Company (GE) announced at the Washington Summit that it will invest $2 billion in Africa and double its workforce there by 2018.
“Africa is one of the most important growth areas, purely from an economic standpoint,” said GE Chief Executive Officer Jeffrey Immelt.
Immelt went on to say that while GE’s sales in Africa were “almost zero” in 2000, the company’s revenue on the continent skyrocketed to $5.2 billion in 2013.
American companies are finally beginning to take notice of the growing opportunities available within the African market. With these massive investments from some of America’s biggest and most influential companies, Africa is set to see a major influx in business from American companies in the coming years.
– Sam Hillestad
Sources: International Business Times, Bloomberg, Reuters
Photo: Bloomberg