Vehicle manufacturer’s the world over have put enormous effort into expanding their presence in China over the last 10 years. It’s no wonder, considering the rapid expansion and rising middle class coming from the Far East. Of course all that growth also means that commercial vehicles will be flying off the production lines, ready to haul the next load of whatever the Chinese have been asked to manufacture (read everything) off to the docks for export.
Automotive sector experts, IHS, has now highlighted Africa as the final automotive frontier. Vast expanses of Africa remain undeveloped, with the ever present promise of rich natural resources and prime agriculture opportunities. Accordingly IHS see light and medium/heavy commercial vehicle markets to double by 2027, just ten years down the track. It will be interesting to see how vehicle manufacturers tackle this project – as we all know Africa has it’s own unique charms and time frames. Fortunately for us, South Africa is often seen as the gateway to the continent. Hopefully our government manages to keep it that way. – Miles Downard
IHS Automotive
London – A new IHS Automotive analysis of future automotive demand in Africa suggests significant growth opportunities on the continent that the industry considers the “Final Automotive Frontier.” With one of the world´s fastest- growing middle classes, Africa is showing pronounced promise for the global automotive industry.
Demand for new light vehicles (Gross Vehicle Weight (GVW) of up to 6 tons) has consistently reached more than 1.6 million units since 2012 and is forecast to grow to almost 2.7 million units sold annually by 2027, IHS says. For medium/heavy trucks and buses, volume is forecast to almost double between 2012 and 2027.
These key findings are derived from two new forecasts now available from IHS Automotive, part of IHS Inc. (NYSE: IHS) a leading source of critical information and insight to the global automotive industry.
Numerous factors are driving this growth. While economic development is stemming from agricultural exports and mining of natural resources, investment in infrastructure and foreign direct investment, regional integration is resulting in evolving trade relationships.
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Key automotive-specific factors are fueling this growth as well – including the fact that several African governments led by South Africa and followed by countries in North Africa are developing automotive industry development plans in an attempt to spur employment and economic expansion. Finally, the majority of African countries are looking to restrict or ban used vehicle imports of a certain age that fail to pass basic safety and environmental standards tests This development is expected to result in significant opportunity for auto sales in the region.
South Africa, Algeria continue to lead for light vehicles; Nigeria and Angola to show strong momentum
“From a light vehicle perspective, just a couple of countries in Africa are expected to see double-digit annual growth by 2027,” said Walt Madeira, senior analyst, light vehicle sales forecast at IHS Automotive. “While volumes continue to be small in most countries, Nigeria is a notable exception with a double-digit growth rate and volume forecast to about 260,000 units in 2027,” he said.
So far, South Africa has ranked as the single biggest market on the continent, according to IHS Automotive analysis. That continues to be the case.
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In terms of current market size, South Africa leads, with Algeria close behind, both with more than a half million vehicles sold annually by 2027.
“However,” Madeira points out, “We expect South Africa´s share of the market in Africa to gradually decrease from almost 40 percent in 2011 to 32 percent in 2027, as other countries including Nigeria and Angola are showing more pronounced growth,” he said.
Medium/heavy truck forecast shows national similarities; Kenya joins top three markets
For medium/heavy trucks and buses, there is a slightly different picture in terms of market growth, according to IHS Automotive analysis, with Kenya joining the leadership ranks by volume of new vehicles expected to be sold.
“Kenya is expected to show the most pronounced growth among African countries, quadrupling in size between 2012 and 2027,” said Andrej Divis, global director, commercial vehicle forecasting at IHS Automotive. “With that, Kenya will round out the top three markets in terms of annual volume, joining Algeria and South Africa,” he said.
