Botswana 2014. Automotive industry background & heritage

Botswana Automotive Industry background and heritage report shows the level achieved in 2014 by the country, one of most developed in the entire African continent, helping to figure out the great opportunities actually in place.

Formerly the British protectorate of Bechuanaland, Botswana adopted its new name upon independence in 1966. More than four decades of uninterrupted civilian leadership, progressive social policies, and significant capital investment have created one of the most stable economies in Africa.

A mid-sized country of just over two million people, Botswana is one of the most sparsely populated nations in the world. Around 10 percent of the population lives in the capital and largest city, Gaborone. Indeed, the country covers a flat territory with up to 70% covered by the Kalahari Desert. It is bordered by South Africa to the south and southeast, Namibia to the west and north, and Zimbabwe to the northeast

Once one of the poorest countries in the world — with a GDP per capita of about US$70 per year in the late 1960s — Botswana has since transformed itself into one of the fastest-growing economies in the world, now boasting a GDP (purchasing power parity) per capita of about $16,400 per year as of 2013.

Its high gross national income is one of largest in Africa and gives the country a modest standard of living and the highest Human Development Index of continental Sub-Saharan Africa.

Mineral extraction, principally diamond mining, dominates economic activity, though tourism is a growing sector due to the country’s conservation practices and extensive nature preserves. Botswana has one of the world’s highest known rates of HIV/AIDS infection, but also one of Africa’s most progressive and comprehensive programs for dealing with the disease.

Roadway infrastructure is reasonably good with a total length above 9.000 kilometers and with Botswana’s major highway part of the 1.800-kilometre long Trans-Kalahari highway serving as a link to the Maputo and Walvis Bay economic corridor.

Like many other African countries, Botswana’s domestic new vehicle market makes up just a small percentage of the country’s total car fleet, as used cars dominate the landscape.

The Automotive industry started the domestic development in the 1990s when the Government began assisting it aiming to broadening the manufacturing base and increasing Botswana’s technological capabilities.

In those years the industry evolved behind high levels of tariff protection in the SACU market, and with the help of subsidy programs before to experience a setback in 2000 when Hyundai Motor plant, which assembled imported semi-knocked down (SKD) kits, mainly for export to South Africa, closed. In July 2005, a second plant established by Volvo was relocated to South Africa resulting in a drop in exports while not affecting the domestic market.

However in the second part of the 2000, market grew with a double digit speed before to be hit, in 2009, by the contraction of global economy that had sharply reduced demand for diamonds. The shortfall was short and in 2010 the growth was on again.

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