Big year ahead for African automotive sector
As interest in Sub-Saharan Africa’s automotive sector gathers steam, it promises to be a key area of focus for major industry players in 2014. Although the issue of affordability makes the region a long-term player in terms of significant sales growth, there are individual markets set to outperform the 9% regional sales growth forecast by Business Monitor International in 2014. There are also key industry themes and events due to play out during the year, which are worth highlighting. These include the implementation of Nigeria’s new automotive policy, and the growing move toward domestic production in the region.
Ones to watch
It is difficult to analyse the region in broad brush strokes, as the individual markets have diverse characteristics, which offer different opportunities for growth, and this will become increasingly evident.
For example, there are smaller markets which are set to achieve double-digit growth in new car sales in 2014 and beyond, owing to their incredibly small base and strong economic growth prospects. Mozambique and Zambia, with projected sales growth of 22% and 20% respectively in 2014, are two such examples. However, their GDP per capita is still among the smallest in the region (US$529 for Mozambique and US$1,487 for Zambia) and, therefore, the client base is largely restricted to fleets and a small elite group of consumers.
Angola is another stand-out proposition, but with a much bigger market, in the range of 20,000 units, compared with less than 5,000 for Mozambique and Zambia. However, it still offers double-digit growth potential (21% in 2014), thanks to its much higher spending power, in terms of GDP per capita of around US$7,000. More importantly, in a region reliant on its biggest spenders, Angola has one of the highest levels of GDP per capita for the richest 20% of the population, at US$13,300.
These three can be contrasted with a more developed market such as…
About the author: Anna-Marie Baisden is Head of Automotives Analysis – Industry Research at Business Monitor International (www.businessmonitor.com)
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