Restarting of an automobile industry in East African Countries: Conditions to invite foreign OEM and case studies in Kenya, Tanzania and Uganda

Publication Type:

Conference Paper


Gerpisa colloquium, Paris (2017)


“automobile industry promotion”, “automobile policy”, “EAC (East African Countries)”, “growth path of automobile industry”, “investment strategy”, “Kenya”, “new emerging market”, “Uganda”, ” Tanzania”


Restarting of an automobile industry in East African Countries: Conditions to invite foreign OEM and case studies in Kenya, Tanzania and Uganda

Toshiyuki BABA (Hosei University Japan)

Key words: “automobile industry promotion”, “automobile policy”, “growth path of automobile industry”, “investment strategy”, “new emerging market”, “EAC (East African Countries)”, “Kenya”,” Tanzania”, “Uganda”

1. Introduction: Purpose and back ground of this research
The research question of this paper is how the automobile industry bears and grows in developed countries. The author would like to consider this based on case studies in Kenya, Tanzania and Uganda in East African Countries (EAC). Though Automobile industries in EAC countries were already started in 1970s, automobile productions had declined because of liberalization in 1990s. Recently, their economy and population have grew and they would like to restart their automobile industry in their own countries.
In the country's development, the status of “a country with having the enough technology to produce the automobile” is a significant Merkmal. In many developing countries, governments would like to develop and foster the automobile industry in such as Asia, South America and Africa. The author think there are 4 reason why many developing countries want to grow an automobile industry. Firstly it is proof of having high technology, and wide range of technologies. Secondly therefore having an automobile industry in a country, leaders of a country have strong feeling of pride. Thirdly there is a big linkage effect and it may strongly contributes to rise GDP. Then fourthly it is also expected to make huge job creation. In case of Japan in 2015 according to JAMA (Japan Automobile Manufacturers Association), though there are only 16 automobile assemblers, the total company number of automobile industry which includes 1st, 2nd, 3rd and more tier suppliers are roughly 25 thousand companies. Regards job creation, there are 5.3 million employees in automobile and its related industries in 2015 Japan. It is 8.3% of Japanese total 63.8 million employees. It is meaningful to promote the automobile industry in developing countries.

2. Analysis: Method and Data
In this paper, there are two main parts. Firstly the author would like to consider how the automobile industry grows in several condition such as market size or GDP/capita and so on. According to interview to automobile assemblers, they always say that market size and other condition are very important to decide to invest a car factory. However of this, they tend to avoid to say the definite number. These numbers to decide investment are very differ by country’s condition such as a population, average technical level of human resources, education, natural rescuers, safety, infrastructures, or degree of industrialization of other industries and so on. Though the author understand these, he would like to make structural flow of how large production or market size needs to start SKD(Semi Knock Down) then shifting to CKD ,then full production, and R&D. The author would like to use “Takt time method” and “Actual production method”.
Secondly the author would like to summarize the situation of automobile market, production of automobile OEM manufacturers, auto parts suppliers or automobile policies and so on according to case studies in Kenya, Tanzania and Uganda in EAC countries conducted from 2016 and 2017.

(Acknowledgements: This research was supported by JSPS KAKENHI 26301024)

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