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STRATEGY: Is Africa the new China?

June 2nd, 2015 No comments

Smile Nigeria. Picture by Devesh Uba via FlickrThe future car buyers of Nigeria. Picture © Devesh Uba, all rights reserved.

Africa is progressively shedding its image of a continent embroiled in poverty, corruption and never-ending wars. Yet the dramatic Ebola outbreak in Western Africa is a harsh reminder that the road to development is a long and tortuous one. Three years ago, I created the Africa Project to jump start the collection of new car sales data in a region still very secretive. From only a couple of countries in 2012, official sales data for Africa on BSCB now covers 23 nations, and its scope is expanding every month. New car sales on the continent are still for the most part in their infancy, making Africa the last frontier in terms of automotive development. If the economic growth we have witnessed in the past decade continues at the same rate, could Africa become the new China and replace it as the world automotive sales engine of growth? As is often the case in such generalist questions, the answer is multi-faceted, and some carmakers are already in a much better place to benefit from future African development.

Street scene in Djenne, Mali. Picture © Leonid Plotkin, all rights reserved. 

1. Economic and demographic background

In 2014, roughly 1.9 million new vehicles were registered in Africa for 1.1 billion inhabitants, that’s only 1.67 new vehicle per thousand inhabitants (NVPT), to be compared to 2.56 in India and 18.16 in China. Geographically, the market distribution is however very uneven: 8 out of 10 new cars are sold in just four nations (South Africa, Algeria, Egypt and Morocco), the remaining 50 countries adding up to less than 400.000 registrations, equivalent to the number of vehicles sold in China in… 6 days. Among the 30 African markets with available total market data, the NVPT rates vary greatly: from 30.63 in Reunion and 17.19 in Botswana to just 0.04 in Ethiopia and Burundi. So we are still very, very far from even the notion of emerging market as far as Africa bar a handful of countries is concerned, but by 2030 its importance will have improved drastically.

Top 20 largest African new car markets in volume – Full Year 2014:

Pos Market 2014 /13 Pos Market 2014 /13
1 South Africa 644,504 -1% 11 Namibia 21,952 n/a
2 Algeria 390,000 -8% 12 Kenya 13,500 4%
3 Egypt 349,100 18% 13 Ghana 13,000 -4%
4 Morocco 122,060 1% 14 Mauritius 10,600 4%
5 Tunisia 81,400 8% 15 Senegal 6,800 13%
6 Nigeria 53,900 8% 16 Ivory Coast 6,400 7%
7 Libya 45,000 0% 17 Zambia 6,100 49%
8 Angola 35,700 23% 18 Mozambique 6,000 n/a
9 Botswana 34,800 -10% 19 Tanzania 5,800 -13%
10 Reunion 25,757 6% 20 Gabon 4,900 -11%

Source: OICA

Africa is now regular around 5% annual GDP growth rate, and despite a predicted oil-related 2015 slowdown to 4% in sub-saharan Africa, countries like Nigeria, Ethiopia, Ghana, Ivory Coast, Kenya, Tanzania, Mozambique, Uganda and Zambia are slated to post average annual GDP growth of between 6% and 8% over the next decade. According to an Emerging Markets Private Equity Survey published by Coface in 2014, sub-saharan Africa is now the most attractive investment destination in the world ahead of South East Asia and Latin America ex-Brazil, whereas it lagged in 8th place only 3 years earlier. The last piece of the puzzle is demographic: the African population will grow from 1.1 billion today to 2.4 billion in 2050, compared to 1.66 billion in India and 1.3 billion in China by then. This will include over 400 million souls in Nigeria alone (almost as much as in the U.S.) and 278 million in Ethiopia (90 today), and an urbanisation rate doubling from 26% today (290m) to 50% in 2050 (1.2bn).

Strong and regular economic growth + more wealth + four times the population in cities mean we can serenely expect an explosion in new vehicle sales. In this context more and more voices in the business world have started to pose the question of Africa as the future engine of growth of the world economy, including in the automotive sector.

Morocco. Picture courtesy thedailybeast.comChefchaouen, Morocco. Northern Africa currently accounts for half of African new auto sales.

2. Which African regions will act as locomotives?

As opposed to the single entities that are China and India, Africa’s main handicap is its fragmentation into a multitude of countries with immense development disparities and the near-absence of flowing trade inside the continent. The key to its economic and automotive growth as a whole is the creation of internal exchanges through free-trade zones, grouping countries with similar development levels that can then act as pulling forces for the remaining nations. African countries need to develop their transport infrastructures and energy networks in collaboration with each other and start matching their laws and currencies so business and wealth can bloom. We can see some of this sprouting out already: 8 countries in Western Africa and 6 in Central Africa now use a single currency (the CFA Franc) and the South African Development Economical Community is developing. In this context, which African regions can we start to draw upon as future African engines of automotive growth?

Eastern Africa

Kenya and Eastern Africa

This region of Africa is the closest to taking off, partly because three relatively well connected countries (Kenya, Ethiopia and Tanzania) are reaching GDP per capita levels that have been statistically known to unlock motorisation: US$ 2.500. It is also home to the African equivalent to San Fransisco’s Silicon Valley, dubbed the Silicon Savannah in Nairobi – Kenya. There, according to the Economist it is easier to pay a taxi fare by mobile phone than it is in New York as over half the Kenyan population already uses the M-Pesa mobile payments system. As Mail & Guardian Africa notes, if “Nigeria and South Africa have for a long time been the economic giants of Africa due mainly to their natural resources, Kenya has future-proofed itself by focusing on financial services and telecommunications” and will become one of Africa’s most dynamic new car markets in the next couple of decades.

One of the proofs that this region is about to get fast-tracked to automotive development is the creation of Mobius Motors, a car designed by Kenyans for Kenyans that we will be studying in more detail further down. The big unknown at the moment is the exact path entry-level car buyers will take in the region. As opposed to China where the culture is reticent to used cars, in the whole of Africa the obvious entry-level choice so far has been used imports from either Europe or Japan – however these sometimes reach the price of a locally-assembled new car due to high import duties. The new car market may take longer to set in but once unlocked, Kenya, Ethiopia and Tanzania should display explosive new car sales annual growth rates, lifting the first two to above 300.000 annual new units and the latter to above 200.000 by 2030.

Western Africa

Nigeria and Western Africa

This is the African region with the both biggest untapped potential at the moment, and the highest level of uncertainty about future development. Nigeria is the most populated country in Africa with 183 million inhabitants, however its new car market currently stands at an insignificant 53.900 annual units. A local automotive manufacture industry has failed to manage a successful transplant so far, something the Nigerian government is trying to change with its “new automotive policy” offering significant tax breaks for car manufacturers establishing a factory in the country. This won’t be enough, and illegal tariff practices by government bodies inside the country will need to be abolished for an auto industry to start flourishing.

If and once on its way this region could become one of the fastest-growing new car markets in the world. Boosted by Nigeria, Ghana, Cote d’Ivoire, Senegal and Cameroon will then act as relays of growth towards nations bridled until now by war and disease, such as Liberia, Sierra Leone and Guinea Bissau. By 2030, Nigeria alone will count 274 million inhabitants and the region close to 500 million. All planets aligning, 1.3 million annual new cars should get registered in Western Africa by then, vs. less than 100.000 today. Nigeria will continue to dominate with almost 600.000 annual new sales with Ghana coming second at 233.800 and Cote d’Ivoire, Senegal and Cameroon all approaching 200.000 annual units.

Southern Africa revised

Southern Africa

Today, South Africa represents two-thirds of all light vehicles produced in Africa and one-third of all new light vehicles sold on the continent. Its market structure is approaching maturity, with over 50 brands present in the country, a strong prevalence for pickup trucks and a very interesting fondness for low-cost cars originally designed for India, such as the Toyota Etios, Datsun Go and Ford Ecosport. Through direct exports and fluid business routes, South Africa has already lifted neighbouring markets such as Botswana and Namibia, however their limited population (just 2 million inhabitants each) will prevent them from having a true impact on the overall African totals of tomorrow. Instead, and with the help of a carefully managed free trade zone, South Africa will extend its area of influence further north to pull Angola, Zambia and Mozambique in its wake – Zimbabwe unfortunately staying out of the picture for now due to its unpredictable political situation. As a result, while South Africa should still tower at 1.1 million annual new vehicle sales, by 2030 Angola should be able to approach 300.000, with Zambia around 150.000 and Mozambique at roughly 75.000.

Northern Africa

Northern Africa

Home to 52% of all African new car sales in 2014 at just under 1 million units, Northern Africa is traditionally separated from the rest of the continent, both geographically by the Sahara desert but also statistically, as it is usually fused with the Middle-East when the rest of the continent is dubbed Sub-Saharan Africa. With their sights firmly set on Europe, Algeria and Morocco are fast becoming auto assembly and export heavyweights, notably through the settling of the Renault Group (Dacia and Renault factories) and PSA Peugeot-Citroen who recently announced they would build a new factory in Morocco by 2018. Tunisia follows in their wake development-wise, although remaining an all-importing country for now which will logically change within less than a decade.

Egypt for its part has had an auto manufacturing activity for decades and due to its population, set to reach 133 million by 2030, has the biggest sales potential, but also the most unpredictable in the region given its frequently unstable political situation and proximity to highly sensitive Israel. New car sales growth in the area won’t be as explosive as it could be in other regions because it is starting from a much higher base, but Egypt (1.2m), Algeria (almost 850.000) and Morocco (450.000) should remain within the Top 5 largest African new auto markets by 2030, with Tunisia and Libya a notch below. The development path in this region will spread inside each country from the coastal, more developed areas into the interior, also potentially spreading into Libya that remains very secretive about its auto market but will be the richest country in the region by 2030.

Top 10 largest African new auto markets by volume – 2030 forecast:

Pos Market 2030 sales forecast NVPT 2030 GDP per capita Annual sales growth Annual GDP growth
1 Egypt 1,173,800 8.80 $15,614 8% 5.07%
2 South Africa 1,113,700 19.34 $22,328 3% 3.83%
3 Algeria 843,200 18.14 $22,967 5% 4.21%
4 Nigeria 585,300 2.13 $10,334 16% 6.42%
5 Morocco 450,100 11.34 $14,231 8% 5.16%
6 Ethiopia 325,000 2.29 $2,987 33% 6.97%
7 Kenya 323,800 4.59 $4,767 22% 6.00%
8 Angola 287,200 7.88 $11,482 14% 5.57%
9 Ghana 233,800 5.85 $7,186 20% 6.29%
10 Tunisia 220,300 17.39 $20,864 6% 4.83%

NVPT: New Vehicles Per Thousand inhabitants sold annually. This forecast was calculated by BSCB based on official 2030 GDP forecasts by the International Monetary Fund, World Bank, KPMG and African Development Bank Group, official 2030 population forecasts by the United Nations Population Division and internal BSCB methodologies linking GDP per capita and car purchase tipping points.

Dacia Logan Taxi Morocco 2014. Picture courtesy FlickrPicture © redahida. Low-cost brands such as Dacia have a bright future in Africa.

3. Which manufacturers are best placed for an African takeoff?

Carmakers who have a solid experience in low-cost manufacturing are better placed to benefit from African new car sales taking off because of two distinct cultural traits: a decades-long habit of importing used cars en masse and a tendency of the population to purchase less ostentatious vehicles than they can afford so as not to attract the attention of taxation offices. Africa’s fondness of used cars contrasts with psychologies visible in China, Japan and to a lesser extend India and means that pending lower import tariffs, car ownership will be among the most affordable in the world, with 20 to 40 year-old used European and Japanese vehicles readily available to purchase. As Ben Longman from African trend analysis firm Trendtype points out, distrust of government taxation offices and their arbitrary and illegal practices has made African consumers very coy about displaying ostentatious signs of wealth that could make them an obvious target for tax. They tend to choose cars in the lower-end spectrum even if they can afford more expensive vehicles. In that manner, Africa is the total opposite of India where consumers tend to bypass lower-end vehicles that wouldn’t appropriately enhance their status.

These two cultural traits are a fertile ground for new low and ultra-low cost cars, offering an affordable alternative to untrustworthy used cars and fitting right into the discretion African car buyers cherish. Enter the notions of frugal engineering and bottom up innovation I explained in my April 2014 article “STRATEGY: Understanding the Indian market”. These skills, perfected by manufacturers in India to no avail so far, certainly won’t be lost on the African car buyer and Indian experience will turn out to be capital for African success. Bottom up innovation has enabled the appearance of $150 laptops or $10 smartphones in Africa and applying these principles to car making will enable ultra-low cost offerings that, although originally designed for an Indian audience in the case of the Tata Nano, Datsun GO and Renault Kwid for example, will fit right into African tastes.

Toyota South Africa by Greg TeeA straight road ahead for Toyota in Africa?

Toyota and Japanese manufacturers

Toyota is currently #1 in Africa at roughly 15% market share, with an estimated 39 African nations having a Toyota as their best-seller – mainly the Hilux, #1 in 30 countries – and that’s not even taking into account the blanket of used Toyota Corollas of all generations going back to the early eighties that is currently covering the continent. However brand loyalty is low in Africa and carmakers are among the least trusted brand categories according to Trendtype, so this is no guarantee for future domination. In fact, Korean manufacturer Hyundai is already outselling Toyota in four major African markets: Algeria, EgyptMorocco and Angola. To sustain and further enhance its domination, Toyota will need to move towards simpler technologies as illustrated in Libya where Chinese ZX Auto pickups replaced the mighty Hilux during the Arab Spring.

Toyota has already been trying its hand at selling low-cost in southern Africa with the Etios, reaching its highest world rankings in South Africa (#4 in 2013), Namibia (#3 in 2014) and Lesotho (#2 in 2014) as well as the Corolla Quest, a previous generation Corolla ranking #4 passenger car in Namibia in 2014, #5 in Lesotho and #6 in Botswana. A future Toyota factory assembling previous generation, simpler Toyota Hiluxes in Africa for Africa would make a lot of sense and capture a large swath of any future growth in the region.

Datsun Go South Africa October 2014The low-cost Datsun GO has launched successfully in South Africa.

Building on the low-cost observation has Datsun as the next Japanese manufacturer set to enjoy potentially outstanding sales in the region. A complete failure so far in India due to its lack of status, the GO has started a very satisfying career in South Africa and there is no reason why this could not be replicated in future African markets. Suzuki through their Indian subsidiary Maruti is already able to offer ultra-low cost models and as a result is #1 in Angola. The rest of the Japanese have been rather discrete as they mainly count on their pickup offerings such as Mitsubishi with the L20 and Nissan with the Hardbody.

Hyundai Verna Egypt March 2012Hyundai sells a 2003 Verna as new in Egypt, to great success.

Korean and Indian manufacturers

Hyundai already outsells Toyota in four major African markets: AlgeriaEgyptMorocco and Angola, and will credibly challenge the Japanese manufacturer everywhere in Africa once it produces a no frills pickup – there are none on the horizon at the moment but trust Hyundai to react very quickly once it decides the time is right. The Korean manufacturer is already selling the Indian-made Grand i10 successfully in some African nations like Angola, but more interestingly in Egypt, it is offering a 2003 Verna as part of its new car lineup to great success as this is the best-selling passenger car overall in that market. Hyundai should and will replicate this concept as it expands into more sub-saharan countries. Indian auto makers Mahindra and Tata are also making significant inroads in southern and central Africa, and pending their survival at home they should not be discarded, Africa fast becoming one of the few regions where they still have a chance to establish a solid export presence.

Dacia Sandero in Marrakech. Picture © Elmar

French and European manufacturers

Cultural and economic ties make most of Africa the perfect playground for French manufacturers: the worldwide Francophone population will rise to 700 million by 2050, 80% of which in Africa. However, even though there is a decades-long heritage of French cars on most Francophone African roads and all French manufacturers still enjoy a solid brand image here, they have failed to fully capitalise on it so far. They are only dominant in northern Africa: since last year Renault manufactures in Algeria where it ranks #1 ahead of Peugeot, Renault-owned Dacia manufactures in Morocco where it leads the market with 27% share and Citroen is #1 in Tunisia with Peugeot at #3 and Renault at #4. Apart from these, Africa has for the most part returned to being terra icognita for French carmakers, an elephant-sized missed opportunity for them.

The Dacia lineup and its only-as-needed equipment philosophy seem like a perfect match for sub-saharan African consumers, in particular the recently unveiled Kwid small car for booming African cities already cramped with traffic. And Renault/Dacia can now count on a full decade of experience selling low-cost cars at every corner of the globe, an invaluable advantage over all other manufacturers when it comes to Africa as we’ve seen above. It took a while, but French manufacturers are now fully conscious of the low hanging fruit that is Africa, with Peugeot joining the ranks of Moroccan manufacturers in the coming years. The French will be a force to be reckoned with over the next couple of decades, as opposed to the quasi majority of other European manufacturers except perhaps Volkswagen, currently weak outside of southern Africa and in dire need of low-cost models such as the Polo Vivo it sells there if it wants a chance at a slice of future African growth.

Foton Tunland Kenya 2013. Picture courtesy of themotorreport.com.auFoton opened an assembly plant in Kenya in 2014 with a 3.000 annual unit-capacity.

Chinese manufacturers

Unbeknown to most, some Chinese carmakers already have a decade of assembling experience in Africa under their belt, with Chery starting in Egypt back in 2004 for example. As I studied in detail in my April 2014 article STRATEGY: How Chinese carmakers are setting themselves up for success, they have been working extra-hard under the radar to secure less developed markets that will form the bulk of the global car sales growth over the next couple of decades, namely South America and Africa. As a result, Chinese carmakers currently hold an astounding 20% market share in Kenya, Senegal and Ivory Coast, 15% in Egypt and 12% in Nigeria. Geely, Brilliance and Chery (with the Speranza brand) are strong in Egypt while Great Wall is making significant inroads in most of Africa, like in Namibia for example where the Wingle pickup ranks #10 overall in 2014. A wide coverage that goes against current perceptions of Chinese weakness in export markets.

But what makes the Chinese implantation in Africa unique is their government’s deep involvement in the infrastructure building of the continent for the past two decades, in essence since the fall of the Berlin wall and the loosening of Russia’s influence over the continent. Along with assembling cars, the Chinese are also building roads, rail tracks and airports (along with, oddly, soccer stadiums), prepping Africa to use their automotive products to their full extent. Chinese manufacturers lack the heritage that brands like Toyota, Peugeot or even Hyundai enjoy in Africa, however car manufacturers as a whole suffer from an extremely low level of consumer trust according to African trends analysis firm Trendtype, so it’s a blank page for everyone so to speak, which evens out the chances the Chinese have at carving themselves a significant slice of the African growth cake. Chinese carmakers are certainly the keenest to succeed here, and will account for one third of sales in a substantial list of African countries by 2030.

Ford Ecosport Italy June 2014. Picture courtesy of autoexpress.co.ukThe Indian-made Ford Ecosport is well suited to booming African cities.

American manufacturers

Linking low cost expertise to the carmakers best placed for future African growth does not currently favour American auto makers. Ford manufactures in South Africa and is faring well both in southern and northern Africa (#3 in Morocco) thanks notably to its Ranger pickup, #1 in South Africa so far in 2015. The Indian-made Ecosport has true potential in booming African cities, and is seemingly already a success in Ethiopia’s Addis Ababa. Further learnings from India will help Ford spread its success towards less developed African countries while it is mulling the opening of a Nigerian factory. Chevrolet also has a relatively strong presence on the continent, but it is mainly due to relatively fragile ties it has kept with Japanese pickup maker Isuzu, ties that have been severed in Australia for example. Chevy leads the Egyptian market outright mainly thanks to the TFR pickup, the best-seller overall which is in fact an Isuzu D-Max. In southern Africa, Chevrolet concentrates on passenger cars and uses the Isuzu brand for commercial vehicles with the D-Max (called KB) market leader in Zimbabwe and Swaziland. Chevrolet will need to prepare a no frills pickup back-up to the Isuzu option and import low-cost expertise from South America and China where it sells the Sail sedan at very competitive prices to count on a bright future in Africa.

Mobius II KenyaMobius II: the first car designed by Kenyans for Kenyans.

The big unknown: African manufacturers

In China, most domestic actors in the automotive industry didn’t exist 20 years ago and Wuling, founded in 2002, now sells almost 1.5 million annual units domestically. It isn’t therefore unreasonable to expect mid-size African carmakers to enter the local automotive scene in the course of the next 15 years. At the moment, most new African car brands popping up here and there are in fact just assembling a range of rebadged Chinese models, such as Mozambique’s Matchedje Motor, Ghana’s Kantanka Cars, and Ethiopia’s Holland Car, a short-lived joint venture with Lifan.

One exception: Kenya’s Mobius Motors, symbolic of the country’s entrepreneurial spirit. Mobius Motors aims at empowering entrepreneurs with the Mobius II, an off-road vehicle priced similarly to a 7 year old sedan. On paper, it indeed offers a solution to a two-pronged issue that is currently locking out entry-level car buyers and particularly entrepreneurs in need of a cost-efficient vehicle: the degradation of rural and peri-urban sub-saharan roads and the inadequacy of most used cars imported into the region from more developed countries (think a 1995 Toyota Corolla sedan), still relatively expensive to buy due to high import duties, but also expensive to maintain because they are old and not designed to an African environment. On paper only, as it will take a lot of convincing to entice Kenyan buyers to trust an unknown brand, even if it is a local one.

2013 Ford Fusion Energi

The joker: Hybrid and electric technology

An option not to be discarded, hybrid and electric cars will enjoy tremendous progress and see their price drop drastically over the coming 15 years, making it a potentially viable option for the growing African middle-class. With Africa’s transport, energy and communication infrastructures sometimes lagging 50 years behind that of developed or even developing countries, we have already witnessed a phenomenon called leapfrogging that could well apply to the hybrid and electric car technologies in the not so distant future. A lot of sub-saharan countries have leapfrogged the construction of a landline telephone network to directly install a mobile network, and as a result Africa will hit 1 billion mobile subscribers this year for a 1.1 billion population! (see How Africa’s mobile revolution is disrupting the continent) There will be a time where the cost of establishing a network of petrol stations that facilitates fast car ownership growth will have to be balanced with a potentially cheaper network of solar-powered charging stations.

It seems far-fetched now, but may not be in ten years time when the vast majority of sub-saharan countries still far from taking off, thus unable to finance large infrastructure projects. Couple this with potential low-cost electric car offerings by some manufacturers and the equation becomes a lot simpler to resolve. As of today the Japanese are best placed in this segment, but this may also change quite fast and all auto makers, notably the Chinese pushed by their government, will have perfected these technologies by the time Africa really takes off after 2030. As for many areas in this report, this is a completely open book and once again the carmakers that will be able to produce low- or ultra low-cost hybrid or electric cars by 2030 will be best placed to succeed, were this segment to leapfrog petrol cars in Africa.

The future car buyers of Senegal. Picture © Anthony Kurz 

In summary

Africa is growing and it’s doing it fast, but its new car market is still a long way off having a real impact on the worldwide automotive scene. I forecast 7 million annual units in Africa by 2030, that’s an additional 5 million annual units compared to today’s 1.9 million which is far from negligible. In the same timeframe, China (predicted 40 million) should add 15 million annual units, India (predicted 7 million) should add 4 whereas both the U.S. (18.5 million) and Europe (16.8 million) will essentially add nothing. The new China: perhaps not, but Africa is the last frontier in terms of development and therefore automotive sales, and will progressively become one of the world’s largest engines of growth in the next two decades. Car manufacturers neglecting the establishment of a dense sales network and production hubs in Africa will miss out on a huge chunk of sales and bear the consequences in the long term.

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Categories: Africa, STRATEGY

Strategy: How Chinese carmakers are setting themselves up for success (Part 1: Africa)

April 18th, 2014 8 comments

Fennec fox. Picture courtesy of Fransisco Mingorance:National Geographic Traveler Photo ContestLike this fennec fox, Chinese carmakers have been walking against the wind in Africa. And it’s worked.

With the Beijing Auto show approaching fast, I though it would be timely to publish an updated version of my 5 Part strategy study of how successful Chinese manufacturers are abroad. Part 1 is Africa.

* This is Part 1 of 5 in my series on Chinese carmakers abroad. See also Part 2 (Latin America)Part 3 (Eastern Europe)Part 4 (Asia) and Part 5 (Mature markets) *

For the first time in the history of car manufacturing, Chinese carmakers sold 1 million cars outside of China in 2012, and estimates show chances are they have repeated that feat in 2013. Chinese manufacturers are now relying more and more on export markets to boost their bottom-line, especially as conditions have worsened for local passenger cars at home over the last couple of years. However as I described in my article “China: How local brands may finally find their mojo at home“, the Chinese are learning how to sell low-cost overseas and applying these strategies at home, making themselves more competitive in the process.

In fact, while the long-dreaded Chinese ‘invasion’ of the West European and American car markets is still a long way off, Chinese manufacturers have been working extra-hard under the radar to secure less developed markets that will form the bulk of the global car sales growth over the next couple of decades.

And this is why they will win.

Speranza A516 EgyptSperanza A516 in Cairo, Egypt

First case in point, Africa.

Apart from Toyota, Hyundai and a bunch of other Japanese manufacturers, no one currently has a lot of time for a continent that is still finding its way into development. Except the Chinese, who started assembling cars there almost a decade ago, as part of a push to be deeply involved in the infrastructure building of the continent. So we’re not just talking cars, but roads, rail tracks, mining and much more.

Egypt was the first cab off the rank when Chery used the Cairo plant previously run by Daewoo to assemble its cars under the Egypt-exclusive Speranza brand in 2004 – apparently because the Chery brand suffered poor quality perceptions after an earlier launch there. Success: Speranza was the 4th most popular passenger car brand in Egypt between 2008 and 2011, selling more than Toyota! Successful models include the A516 (#9 from 2007 to 2009) and the Tiggo (#14 in 2011). Since 2012 however, other Chinese manufacturers have stepped up a notch in Egypt…

Golden Dragon Haice Egypt 2012The Golden Dragon Haice was the best-selling Chinese model in Egypt in 2012.

The Golden Dragon Haice managed to rank as high as #6 in September 2012 and finished the year as the best-selling Chinese model at #15, and the Geely Emgrand EC7 has done much, much better, finishing the year 2013 in third position overall with almost 5% of the market on its own! King Long, Brilliance and JAC models have also started to appear within the monthly Top 30.

Holland Car Abay V2Holland Car assembles the Abay (aka Lifan 520) in Ethiopia.

In Ethiopia, Lifan and JAC have cooperated with Holland Car, the country’s first car brand, to assemble models locally including the Holland Car Abay (a rebadged Lifan 520), Tekeze (JAC Tongyue) and Awash (JAC B-Class), all named after Ethiopian rivers. Since 2010 Lifan assembles cars under its own name in the country and has recently introduced the X60 SUV. No sales data for that country so it’s hard to gauge their success (not as high as Lifan would want according to somalilandpress.com) but a second example of clever re-branding to fit the local culture as a first step.

Foton Slip SUP Kenya 2012The Foton SUP is assembled in Kenya since 2011.

In Kenya, Foton launched its first domestically produced truck, the SUP pick-up, in June 2011 using an existing local factory, and has opened its own US$50m assembly plant in Nairobi in March 2012 with a capacity of 10,000 annual units. Chery is also thinking about a Kenyan plant, initially limited to produce 1,000 units in 2013. As a result, Chinese manufacturers now hold 20% of the Kenyan car market…

Geely Emgrand EC8 Kuwait. Picture courtesy of qabaq.comGeely Emgrand EC8 in Kuwait

Either from these 3 assembling hubs or through straight exports from China, Chinese carmakers are organising their expansion towards other African countries. The Egyptian hub makes it more practical to export to Libya, Algeria, Sudan, Syria, Jordan, Saudi Arabia, Kuwait, the UAE and Iraq notably, where the Great Wall Deer seems to be particularly successful. Another potential hub for the region could be Iran where Chery has been assembling cars since 2006, with the Fulwin 2 hitting a record #4 last month.

JAC Tojoy MadagascarJAC was the #2 most popular brand in Madagascar at the end of 2012.

Ethiopia and Kenya can also be used as relays to Tanzania, Mozambique or Madagascar where some Chinese carmakers already have a solid presence: JAC was up to #2 brand with over 8% share over the third quarter of 2012 below only Nissan, and Great Wall was 7th in Q1 2013. Further West, Chinese carmakers now hold 20% of the Senegal and Cote d’Ivoire markets, with latest Cote d’Ivoire data showing Great Wall at #10 in 2010. The logical next step in Western Africa for Chinese car makers would be assembling cars in Nigeria…

Assembling cars in Nigeria would enable them to carve up a significant market share there as well as in neighbouring Ghana, Cameroon, Gabon, Mali and Burkina Faso, all at various stages of development but destined to grow fast in the next decade and beyond. South Africa also seems to be a missing link right now, however when you realise that it is currently the only mature market on the continent, it’s easier to understand why the Chinese haven’t spent too much energy trying to crack it yet. I will spend more time talking about Chinese carmakers’ strategies in mature markets in Part 5 of this series.

ZX Auto GrandTiger Libya 2011aZhongXing/ZX Auto GrandTiger in Libyan Civil War outfit

Another way Chinese models have come under the spotlight in export markets has been through government agreements, notably in Libya, albeit in a totally unexpected way (you also will see its impact on the Cuban car market in the next installment of this series). During the 2011 Arab Spring, Libyan rebels got their hands on a batch of 5,000 ZX Auto GrandTiger pick-ups that the government had recently received and fit their heavy artillery on them, catapulting the vehicle onto worldwide TV screens for a solid 6 months. A marketing opportunity that ZX Auto fully embraced, boasting about its reliability and featuring the Libyan civil war on giant LED screens at the 2012 Beijing Auto Show (see the full Libya article here).

Stay tuned for Part 2 of this series: Latin America!

Categories: Africa, China, World

Senegal: The only country in the world to crown Mitsubishi?

April 29th, 2013 4 comments

Mitsubishi L200 Senegal 2013Could the Mitsubishi L200 top the Senegalese models ranking?

* See the Full article by clicking on the title! Many thanks to Andrea *

Up until today I had not managed to get official sales information by brand for Senegal but thanks to Andrea we now have a little bit more insight on this sub-saharian market, and The Africa Project continues to map out this fascinating continent little by little. Granted, the data is a little… well dated as it is from 2008 when an estimated 6,000 new vehicles were sold in the country.

Dakar Alexandre FoulonStreet scene in Dakar, Senegal. Picture by Alexandre Foulon, all rights reserved.

However it reveals a very interesting fact about the Senegalese market: that Mitsubishi leads the manufacturers ranking ahead of Toyota, Ford and Volkswagen. If confirmed and still valid in 2013, this would make Senegal the only country in the world where Mitsubishi is crowned. The Japanese manufacturer’s previous “best” was the Philippines where it currently ranks #2.

Previous post: Senegal: Toyota Hilux favourite, Peugeot losing grip

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Categories: Africa, Senegal

Tunisia Full Year 2012: Renault, Volkswagen & Peugeot dominate

March 7th, 2013 3 comments

2013 Renault Symbol Tunisia 2012The new Symbol should enable Renault to stay on top in 2013.

* See the Top 30 best-selling brands by clicking on the title! Many thanks to Alexandra *

Car sales data for Tunisia is very rare to come across but thanks to Alexandra I am able to share with you an all-brands ranking for Passenger Cars only for the Full Year 2012. Note this ranking does not include Light Commercial Vehicle sales which was the case for my last Tunisian update. New car sales in Tunisia are up a very healthy 15% year-on-year in 2012 to 37,132 registrations. Renault remains the most popular carmaker thanks to 6,207 units and 16.7%, however down from 18.9% in 2011. Volkswagen ranks #2 again in spite of sales down 11% to 5,140 and 13,8%. The German manufacturer is now threatened by Peugeot, up one spot and an impressive 28% year-on-year to #3 with 5,095 sales and 13.7%.

2013 Peugeot 301 Tunisia 2012. Picture courtesy of Beirutnightlife.comThe arrival of the 301 could mean Peugeot will rank #2 in Tunisia in 2013…

Further down, Fiat drops one rank and 11% to #4, Kia remains #5 but is up only 1% to 9.3% share vs. 10.6% in 2011, Citroen is up 33% to #6, Ford up 57% to #7, Chevrolet up 81% to #8, Seat up 19% to #9 and BMW up 59% to #10. Notice also Toyota up 29% to #11, Mitsubishi up 298% to #13, Mercedes up 80% to #14, Hyundai up 1389% (!) to #15, Mazda up 394% to #17, Opel up 122% to #19, Land Rover up 256% to #22 and Lancia up 625% to #24.

Previous post: Tunisia August 2012: Renault, Peugeot and Citroen on top

Full Year 2012 Top 30 All-brands Ranking Table below.

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Categories: Africa, Tunisia

Nigeria Full Year 2012: Toyota up 30% in declining market

February 26th, 2013 2 comments

Toyota Hilux 2012Toyota Hilux

* See the Top 7 best-selling brands by clicking on the title! Many thanks to nami *

After growing by 15% over the first 6 months of the year thanks to bank credit starting to trickle in, new car imports in Nigeria are back down by 5% over the full year to 48,490 registrations. One brand stands out from the crowd: Toyota, up a massive 30% year-on-year to 19,755 sales or a mammoth 40.7% market share which is over 10 percentage points higher than in 2011 when it held 29.7% of the market. Far below we find Kia at 5,034 units and 10.4% and Hyundai at 4,259 sales and 8.8%, adding up to just over 19% vs. 28% in 2011. Ford is up 4% to 2,613 units thanks to the Ranger and Honda is up a huge 58% to 2,473 sales.

Previous post: Nigeria 6 months 2012: Toyota grabs 35% of recovering market

Full Year 2012 Top 7 brands Ranking Table below.

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Categories: Africa, Nigeria

South Sudan 2012: Toyota Land Cruiser should top sales charts

February 11th, 2013 3 comments

Toyota Land Cruiser South Sudan by KohsahToyota Land Cruiser Prado. Picture by Kohsah, all rights reserved.

Today we welcome a new country on BestSellingCarsBlog, one that actually acquired its independence after this site was created. The Republic of South Sudan became officially independent from Sudan in July 2011. There is no available information about the best-selling models and carmakers in this country online so if you come across any data at all please do comment on this article so we can all improve our knowledge of this African market.

First observations through YouTube videos of the capital city Juba show a surprisingly high amount of new cars (compared to neighbouring countries in the region) probably purchased by the non-government organisations present in the country. The Toyota Land Cruiser Series 70, 200, Hilux and Land Cruiser Prado (in this order) should top the sales charts as they are omnipresent in the streets, with literally no other new model apart from the Mitsubishi Pajero and Toyota Hiace showing off their new bonnet.

More South Sudan street videos below.

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Categories: Africa, South Sudan

Kenya December 2012: Toyota Land Cruiser most popular

February 11th, 2013 2 comments

Toyota Land Cruiser Kenya December 2012Toyota Land Cruiser

* See the Top 3 best-selling models and Top 5 carmakers by clicking on the title! *

Thanks to the hard work of Rutger I am able to share with you some very rare data about the Kenyan new vehicle market, up a shy 1% year-on-year in 2012 to 12,798 units. This is the “the slowest growth since 2009 when reduced economic activity due to the post-election and global economic meltdown cut orders by 20%”, says local website Business Daily Africa. General Motors East Africa, mainly distributing Isuzu light and heavy commercial vehicles, maintains its lead over the Kenyan market with sales up a robust 9% to 3,421 units for a 26.7% market share. “We had a lot of orders for our Isuzu buses last year. We could not supply all the units in 2012 and the strong order book is keeping us busy in this first quarter,” says Rita Kavashe, GMEA’s managing director.

The saloon car market has come under serious attack from imported second hand vehicles over the past 5 years, increasing the pressure on Toyota, up just 3% at #2 with 3,099 sales and 24.2%, and CMC Motors, which deals in Land Rover, Volkswagen and Ford models, down to #5. Model-wise, in December the Toyota Land Cruiser takes the lead with 108 sales and almost 10% share, followed by the Mitsubishi Diesel 9-tonne truck and the Toyota Hilux Double Cab.

Previous post: Kenya May 2012: Isuzu Pick-up dominates models ranking

Full December 2012 Top 3 models and Full Year 2012 Top 5 carmakers Ranking Tables below.

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Categories: Africa, Kenya

Angola 2011: Hyundai leads, potentially places ix35 #1, Suzuki Celerio #2

December 3rd, 2012 No comments

Hyundai ix35

* See the Top 5 best-selling brands by clicking on the title! Many thanks to José *

Thanks to José I can now share with you actual data for 2011 in Angola for the very first time on BSCB as part of The Africa Project. In 2011 the Angolan new car market was up by a huge 32% year-on-year to 23,390 registrations, nearly back to the pre-crisis levels of 2008 and 2009. The passenger car segment accounts for 72% of the total market and grew by 38% in 2011. At this stage there is only a Top 5 brands ranking but this is way better than my YouTube estimations to-date! As we learnt a few months ago, Hyundai is the most popular carmaker in the country but the new news is that it totally dominates the landscape with 5,901 sales and 25.2% share.

Suzuki Celerio

This is nearly double the #2, Suzuki at 3,275 units and 14%, and more than double the sales of Toyota, Hyundai’s big opponent on the African continent, at 2,871 units and 12.3%. Chevrolet and Kia round up the Top 5 brands in Angola. Model-wise, the data is more sparse, but given Hyundai’s domination and based on the traffic in Luanda, I will venture the guess that the Hyundai ix35 is the best-selling model in the country.

Suzuki Jimny

At least we now know that the Suzuki Celerio is #2 with 1,465 sales and 6.3%, the Suzuki Jimny is #5 at 1,080 units and 4.6%, the Chevrolet New Spark at #8 and Chevrolet Spark Lite at #9. An interesting trend in Angola is the emergence of a new middle class that buys practical cars like the ones above along with the Chevrolet Sail, and the proportion of sales going to businesses declining. Most private buyers purchase with cash upfront with only 7% of sales going through bank financing.

Previous post: Angola 2011 (estimation): Mitsubishi L200 and Toyota Hiace solid, Suzuki Celerio, Hyundai ix35 and Kia Sportage impress

Full Year 2011 Top 5 Ranking Table below.

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Categories: Africa, Angola

Best Selling Cars Blog: The Africa Project

December 1st, 2012 1 comment

Street scene in Djenne, Mali. Picture by Leonid Plotkin, all rights reserved. 

* Click on the title for the direct links to 47 African countries covered on BSCB! *

This Africa Project update is brought to you by online car insurance from Auto Insurance.

A few months ago, I launched the Africa Project on Best Selling Blog to try and bring African countries to a similar level of data and car sales information as the rest of the world. I want to thank you all for contributing to the Africa Project to date, with notably a monthly coverage resumed for Algeria thanks to Mermou, Historical information for Rhodesia (Zimbabwe) between 1958 and 1980 thanks to Frank and exclusive models and brands ranking for Kenya thanks to Myk plus a look at how Hyundai is ahead of Toyota in 5 major African countries including South Africa.

The BMW Cheetah was a rebadged Glas 1700 assembled in Rhodesia in the sixties.

But there is still a lot of work to do and many countries to explore, so I encourage you to keep contributing to The Africa Project by sending/shairing any piece of information you have, even if it’s just observations you have made when you visited various African countries. Once/if BSCB gets bigger, I may have the possibility to travel to these regions to report about them myself, but for now my own experience of Africa is very limited.

If you live in Africa or have data on any African country please be sure to get in touch by filling the ‘Contact us’ form I will contact you right away.

There is a revitalised interest towards Africa in France right now.

In terms of new car sales Africa is the last frontier, with only a few countries having set up regular reports. However no less than 1.4 million cars were sold on the African continent in 2011, and even though it is still plagued with war and poverty in some parts, it is now developing fast. The African Bank of Development predicts 4.5% economic growth for the region in 2012 and 4.8% in 2013, with peaks at 6.9% in Western Africa and 5.6% in the East.

Indeed, one of the things I noticed during my last stay in France is the revitalised interest, focus and introspection towards the African continent, with which France has long running cultural and economical links. French rap band Sexion d’Assaut recently released the song ‘African’ (the video clip shot in Senegal is above), a harsh, realistic and at times humorous view on how Africans are perceived in France and abroad. In the car world, this renewed interest translates into statements like Peugeot’s, refocusing its energy on sub-Saharan Africa in 2012.

On top of this, Japanese carmakers Toyota, Nissan and Honda have had decades of strong sales in the region, and lately Chinese manufacturers have landed en masse, making Africa a fascinating continent to follow, and this is why I want to make it a special focus on Best Selling Cars Blog.

The Dacia Lodgy is assembled in Tangier, Morocco.

Problem is, new car sales reporting is still quite disorganised and I only have data for a few countries. South Africa, by far the biggest African car market at 570,000 sales in 2011, Algeria (#2 at 300,000) and Egypt (#3 at 176,000) are the only 3 I am able to cover monthly. There are still a lot of unknowns…

So this is where you come in dear readers.

If you work in the car industry anywhere in Africa, within organisations that would have the potential to bring together some car sales data, or if you just happen to have sales info, please do get in touch by filling in the ‘Contact us’ form.

I would like to build Best Selling Cars Blog towards the site that gives reliable sales data for as many African countries as possible so everyone can have a better understanding of this fascinating and fast evolving market, so I’m counting on you BSCB readers to improve the coverage on Africa! Many thanks in advance for all your help.

See the direct links to the 47 African posts below.

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Categories: Africa

Rhodesia (Zimbabwe) 1958-1980: Historical Info now available!

September 27th, 2012 19 comments

The Renault 4 was the most successful model in Rhodesia over the period

* See the Top 25 most produced models by clicking on the title! Many thanks to Frank *

Today the Africa Project is getting its first historical contribution, thanks to Frank Stevens. Frank was born and grew up in what was used to be Rhodesia up until 1980 when it became Zimbabwe, one of the most tumultuous times the country has known. During that period, up to 17 car manufacturers assembled models in a country plagued with United Nations trade sanctions, and thanks to Frank who also worked at the National Vehicle Registration Department there in the seventies, I am able to share with you the best-selling models in Rhodesia from the late fifties to the early eighties. Fascinating info if you ask me!

1958 Pontiac Strato Chief

In the fifties Rhodesia, being part of the Commonwealth, truly benefitted from the American and European export drives. The most popular models in the country at that time included the Chevrolet Impala, Dodge Polara, Pontiac Strato Chief, Ford Galaxie 500, Plymouth Fury and Mercedes 220 fintail, sharing the roads with the Austin 1100, Wolseley 6/110, Skoda Octavia, Borgward Isabella, Taunus 17M, Ford Zodiac and Anglia, Jaguar S type, Opel Rekord, Vauxhall Victor, Volvo Amazon, Holdens and even the odd Datsun…

1963 Isuzu Bellett

In 1958 BMC opened an assembly plant in Umtali (now Mutare), and Ford did the same in 1960 at Willowvale in Salisbury (now Harare) with the two brands likely dominating sales in Rhodesia in the early sixties. However the Unilateral Declaration of Independence from Britain in 1965 triggered UN trade sanctions against Rhodesia from 1966 until the creation of Zimbabwe in 1980. As a result BMC and Ford stopped supplying CKD kits and by 1967 there were very few new cars available, except save for the occasional Isuzu Bellett and Daihatsu Compagno.

Peugeot 404

From 1968 onwards, the composition of the Rhodesian new car market changed drastically as sanctions busters found new sources of CKD kits and new brands made their appearance on the streets. Thanks to Frank’s meticulous observation and note-taking when working at the Vehicle Registration Department at the time, I am able to share with you the most produced (and therefore best-selling) models in Rhodesia from 1966 to 1980.

Datsun 120Y

Interestingly, the Frenchies dominate the ranking with 4 models in the Top 5… The Renault 4 is likely to be the best-seller over the period ahead of the Peugeot 404 in all its formats (sedan, station-wagon, pick-up) with the Datsun 1200/120Y/140Y rounding up the podium. The Renault 12 and 10 follow while the Datsun 1500 pick-up ranks #6.

The BMW Cheetah/2000 SA was a rebadged Glas 1700 assembled in Rhodesia

The Alfa Romeo Giulia ranks #7, the Mazda B1600 pick-up is #8, the BMW Cheetah #9 and the Peugeot 304 #10. Other interesting entries include the Citroen DS at #11, the Alfasud at #14, the Toyota Corolla Mk2 at #18, the Peugeot 504 at #22 and the VW 1300/1600 bush buggy at #24.

Previous Zimbabwe post: Toyota Corolla sovereign, info needed

Info on Rhodesia assembled BMWs, the Rhodesian Bush-War and Full 1966-1980 Top 25 Ranking Table below.

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Categories: Africa, Zimbabwe