Africa and Middle-East Automotive EPS Market - Growth, Trends, and Forecasts (2022 - 2027)

The Africa and Middle-East Automotive EPS Market was valued at USD 858.39 million in 2021, and it is projected to reach USD 1601.21 million by 2027, registering a CAGR of 10.95% during the forecast period (2022-2027).

During the outbreak of the COVID-19 pandemic, the market suffered from supply chain disruptions as several major economies around the world were forced into lockdown and economic activities were halted. To adhere to social distancing norms and limit the spread of the virus, all manufacturing units and OEM plants halted production. During this time, demand for passenger vehicles fell precipitously. The current trend is expected to continue throughout the Forecasts period.

Over the long term, reduction in complexity and an increase in efficiency, OEMs have shifted their focus from hydraulic to electric power steering systems. EPS systems provide steering assistance using an electric motor rather than a hydraulic pump, which helps to reduce vehicle weight. Additionally, due to the lack of belt-driven hydraulic or manual pumps, which run continuously whether assistance is required or not, electric systems are extremely fuel-efficient. The amount of steering force applied by the driver is calculated by electronic sensors and amplified by an electric motor to make steering easier.

Despite the high demand for electric power steering systems, this market still faces some challenges. The higher cost of EPS compared to traditional steering systems, as well as the lack of steering feel, may hamper market growth. However, today, second-hand vehicles in countries in Ethiopia are hugely limited due to high import duties and a limited supply of vehicles pushing for newer automotive and EPS manufacturing factories.

Key Market Trends

ECU is the Fastest-Growing Component

The electric ECU provides a lower cogging torque for the better driving experience, improving the interaction between the permanent magnets of the rotor and the stator slots of the Permanent Magnet (PM) machine. Traditional steering systems required the driver to continually make minor steering corrections to compensate for irregularities, such as road camber or crosswinds. But modern Electric Power Steering automatically assists the driver in case they encounter such barriers. The ECU unit can register if the driver is continuously counter steering, and itself automatically compensate for the correction. This makes driving more comfortable and less stressful.

ECU consists of 3 significant components that are the control module, power module, and control software. The control module gives access to power the switches and performs diagnostics functions in the power module. While the power module consists of three half-bridges where each half-bridge powers one phase of the three-phase electric. Lastly, the control software is the algorithm that enables the control of the speed and torque of the electric of the EPS unit. However, designers face challenges such as meeting flexible but a cost-effective architecture that can be equipped in cars ranging from SUVs to compact vehicles by satisfying power requirements for different steering rack load.

However, there is a demand for higher steering power, to improve driver comfort and feedback without losing power assistance, especially at a slower pace. For instance,

• Nexteer uses three different sensor technologies. While each can be used with the same position sensor, torque sensor, and ECU. The company has introduced solutions that reduce the steering angle sensor, which provides active lighting, stability control, and ADAS. They will enable us to broadcast an absolute steering position based just on the EPS motor sensor.

The African Market Has High Growth Prospects

Companies are expected to benefit from reforms and policies after the formation of the Association of African Automotive Manufacturers (AAAM). For instance, any car company that sets up a local assembly plant in Nigeria, Kenya, and Ghana, could get tax holidays of up to 10 years and duty exemptions.

To attract a large customer base and generate more revenue, automotive manufacturers prefer to incorporate cutting-edge solutions in their vehicles. As a result, the Africa and Middle-East automotive EPS market is benefiting from a robust automotive sector and an increase in people's disposable income. Consumers in the region are currently demanding extreme features in their vehicles, such as power steering systems, which make vehicles more responsive, resulting in better driving comfort. In addition, there has been an increase in the integration of advanced driver-assistance systems.

Automobile manufacturers are incorporating several systems that improve vehicle safety as a result of these factors. Premium vehicles no longer have access to advanced safety and security features. Consumers are becoming more concerned about safety systems and technologies, and as a result, they are more interested in purchasing vehicles that have better safety systems.

Morocco is a developing automotive manufacturing hub, whereas South Africa has a long history of automobile production. However, multinational vehicle manufacturers are also establishing manufacturing plants in Angola, Ethiopia, Ghana, Kenya, Namibia, Nigeria, and Rwanda, and locally owned African producers are embarking on this less traveled path.

According to the International Organization of Motor Vehicle Manufacturers, Africa has more than a billion people, or 17% of the world's population, but accounts for only 1% of cars sold globally, compared to China's 30%, Europe's 22%, and North America's 17%.

Moreover, Ethiopia's automotive potential is underpinned by a state-driven economy and a government that is geared toward industrialization. Bishoftu Automotive Industry (BAI), is an automotive manufacturing and assembly company run by the Ethiopian military. BAI specializes in assembling, upgrading, overhauling, and localizing buses, pick-ups, SUVs, trucks, and military equipment such as tanks and armored personnel carriers (APCs). As a result, Ethiopia generated the most interest among automotive players as a future market in Africa.

Competitive Landscape

The Africa Middle East Automotive Power Steering Market is consolidated with existing market players such as JTEKT, Bosch, NSK, and Nexteer Automotive, which hold the most significant shares. To have an edge over their competitors' companies are making joint ventures, partnerships, and launching new products with advanced technology.

This new facility will manufacture Electric Power Steering (EPS) systems for Group PSA, as well as Driveline systems for FCA, Groupe PSA, and Renault-Nissan-Mitsubishi Alliance. The company expects to hire around 500 people at the Kenitra plant by 2020.

Stellantis, which was formed in January 2021 by the merger of Fiat Chrysler and PSA, announced in September that its supermini electric car Opel Rocks-e would be manufactured at the PSA plant in Kenitra, northeast of Rabat, with a capacity of 200,000 vehicles per year. Stellantis, the world's fourth-largest automaker, intends to increase its spending on Moroccan-made parts from EUR 600 million to EUR 3 billion by 2025.

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