It was reported that both automotive giants Ford Motors Company (NYSE:F), as well as Nissan, are currently seeking to make a deal with the Kenyan Authorities. This deal involves the development of an auto-manufacturing industry in the East-African country.

The reason behind this interest by the companies is due to the fact that there has been an uprising interest in sub-Saharan African countries. The main reason behind this attraction is due to the constant increase in the dependency of African countries, with regards to oil-and-commodities.

Further reasoning behind the interest in developing Auto industries in Africa

Through research done by analysts, it was revealed that there seemed to be whimsical trade between Southern Africa and its Northern neighbors. This is in terms of automotive manufacturing trade. The reason behind this is mainly due to the challenges that the countries face.

Some of these challenges include the volume of imported cars in the country, poor road, and ports infrastructure. As well as, a lack of vehicle financing options- for citizens of the country.

The CEO of the Pretoria, South African Ford Branch stated that in order to show true interest in the development of auto industries in the county, assemblers cannot be the only thing that companies integrate into the countries.

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In addition to this, he further stated that if one is truly interested then they should be willing to incorporate the entire value chain into the country, the entire eco-system of the industry.

Further limitations for the industry in the African continent

It was allegedly reported by Yokohama, Japan-based company’s South African managing director Mike Whitfield that a large obstacle that vehicle manufacturers face throughout the continent, is a simple lack of funding.

One of the African countries that are actively involved in attempting to further develop the industry, Nigeria, has taken up a partnership with FirstRand Limited (JSE:FSR) for a total of $73 million in assistance funds.

Nigeria has been advised multiple times to create a ban on imported cars that are over one-year-old. Furthermore, it was also suggested that a tariff should be placed on cars that are between two to five years of age. However, there has been no mention of immediate actions against vehicles, which are older than this period. The reason to this is due to the fact that there are no affordable alternatives of transportation for citizens in the country.