info.afrindex.com
China-Africa Trade Information Service
info.afrindex.com
China-Africa Trade Information Service
Image from Africa Business Pages
The used car market in the African market in the future has tremendous growth potential. Demand for used cars has soared in many African countries due to rising levels of emerging middle class and disposable income in Africa.
Nigeria is the biggest market for used cars in Africa, and is also one of the most affluent in the Sub-Saharan region.
The country boasts a population of over 140 million with approximately 40 million currently belonging to the rapidly emerging middle class. While new car sales are slowly picking up across the country, used sales still best those of new vehicles by a ratio of 4:1.
Apart from South Africa and the North African countries the rest of the continent is poised for a major increase in demand for second-hand cars over the coming years. It is estimated that by 2030 car ownership will more than double to reach a healthy number of 90 million registered vehicles.
In East Africa, more than 96 per cent of vehicles imported into Kenya are used ones. Its neighbour, Ethiopia, along with Nigeria, is one of the largest importers of used vehicles globally. Given the current limited disposable income, Ethiopia’s automotive market is dominated by second-hand imported vehicles – particularly commercial vehicles. Commercial vehicles are Ethiopia’s second most valuable import overall, worth over US$850 million. Approximately 85 per cent vehicles in Ethiopia are second-hand imports, of which almost 90% are Toyotas, imported primarily from the Middle East – mostly from Dubai.
Region-wise, West Africa is clearly ahead of the rest of Africa as it imports over 900,000 used cars every year, which is approximately 70 per cent of total imported vehicles in Africa. Central Africa contributes the least to used car business and imports an average of 65,000 vehicles per annum. Interestingly, it is slightly higher than what Kenya, alone, imports in one year on an average.
All in all, the used car business in Africa will continue to grow as more and more Africans enjoy the benefits of economic prosperity sweeping across Africa and benefit from rising disposable incomes and move to upgrade their lifestyles.
