South Korea May 2015: Hyundai Sonata reclaims pole position

Hyundai Sonata South Korea May 2015. Picture courtesy motorian.krHyundai Sonata

* Now updated with the Top 53 local models, Top 140 foreigners & Top 40 All-brands *

The April post has now been updated with all foreign models data.

Sales of new local models in South Korea edge past their level of a year ago in May at +0.2% to 121.497 registrations, bringing the year-to-date total to 597.470 units, up 2% on 2014. Hyundai at 45.3% of the market and Kia at 32.9% continue to hold the lion share of domestic sales, with General Motors Korea (including both Chevrolet and Daewoo) at a round 10%, Ssangyong at 6.4% and Renault Samsung at 5.4%. Leader in 2014, the Hyundai Sonata reclaims the title of best-selling nameplate at home in May for only the 2nd time in the past 10 months. Its 9.495 sales and 7.8% share are however not enough yet to dislodge the Hyundai Porter from the 2015 top spot, adding up to 40.710 deliveries vs. 41.683 for the LCV.

Hyundai Tucson South Korea May 2015. Picture courtesy motorian.krHyundai Tucson

In third place, the Hyundai Tuscon is airlifted by the new generation: up 95% on the old model a year ago to 7.270 sales and 6% share and now #9 year-to-date vs. #13 over the Full Year 2014. The Kia Morning (-22%) is the only non-Hyundai in the Top 6 at #4, with the Avante and Grandeur following. The Kia Sorento and Carnival continue to benefit fully from their relaunch at +258% and +336% respectively on May 2014. Now in its 5th month in market, the Ssangyong Tivoli still hasn’t run out off steam, posting its best monthly volume to-date at 3.437 units in 14th place. The same cannot be said for the Hyundai Aslan launched last October but down to #35 with a paltry 504 sales. Finally, a slight facelift and better equipment for 2015 are enough to push the lagging Chevrolet Captiva up 90% year-on-year to #24.

Chevrolet Captiva South Korea May 2015Chevrolet Captiva sales are up 90% year-on-year in May.

Among foreign manufacturers, BMW takes the lead thanks to sales up 45% year-on-year followed by Mercedes (+42%), Volkswagen (-6%), Audi (-26%) and Ford (+82%). Notice also Nissan up 70%, Peugeot up 108%, Jeep up 51%, Porsche up 56% and Infiniti up 3-fold on May 2014. The BMW 5 Series becomes the best-selling foreign nameplate in the country thanks to 1.590 sales above the BMW 3 Series at 1.346 and the Mercedes E-Class at 1.342. The Mercedes S-Class is solid at #4, the Audi A6 is back up 8 spots on April to #6 and the VW CC does the same to land at #8

Previous post: South Korea First Quarter 2015: Imports hit record levels

Previous month: South Korea April 2015: New Hyundai Tucson shoots up to #2

One year ago: South Korea May 2014: Hyundai Sonata now #1 year-to-date

Full May 2015 Top 53 local models, Top 140 foreign models and Top 40 All-brands below.

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Laos Full Year 2014: Chery QQ best-seller, Chinese above 30% share

The Chery QQ is the best-selling vehicle in Laos. Picture: Flickr

* See the Top 25 brands and Top 20 models by clicking on the title *

Thanks to Proliance, for the first time on BSCB we can share with you official new car sales data for Laos. In 2014 15.636 new light vehicles found a buyer in this country of 6.8 million inhabitants, or 2.3 new vehicles per thousand inhabitants which places it at roughly the same level as India. This landlocked country’s geographic situation goes a long way into explaining its new car market structure: it shares borders with China, Vietnam and Thailand among others and as a result has become the country in the world where Chinese carmakers hold the highest market share at 30.5%, beating the previous official records held by Bolivia (27.9% in 2012) and Uruguay (23.1% in 2013).

Hyundai Eon World June 2012The Hyundai Eon, imported from India, is #2 in Laos in 2014.

Brand-wise, Toyota (11.9%) and Hyundai (11.6%) are in a close grip, followed in third place by Chery (10.5%) with Chevrolet and Kia rounding up the Top 5. Chery is one of 6 Chinese manufacturers in the Top 15 and 11 in the Top 25, with the most popular in 2014 being BYD (#7), Geely (#9), Great Wall (#12), Gonow (#13), Dongfeng (#15), JAC (#16), ZX Auto (#19) and MG (#20). The Chery QQ is the best-selling nameplate in Laos in 2014, making it two countries in the world to officially crown a Chinese model along with Venezuela and the Dongfeng Rich. The other two are unofficial: the Geely CK in Cuba and the Hawtai Lusheng E70 in North Korea.

The Chery Riich is inside the Top 15 in Laos. Picture Christian & Patricia Gasnier.

The Laotian models ranking is a fascinating testimony to the commercial links the country has established with some of its neighbours: the Hyundai Eon is #2 overall and comes from India, the Chevrolet Sail at #3 comes from China while the Isuzu D-Max at #4, Toyota Fortuner at #6, Toyota Hilux at #9 and Mitsubishi L200 at #12 are all imported from Thailand where they are manufactured. As far as Chinese nameplates are concerned, there are 5 in the Top 15:  the Chery QQ, Chery A1, Geely Panda, BYD F0 and Chery Riich.

Previous post: Laos 2012 update: Chinese models keep spreading

Full Year 2014 Top 25 brands and Top 20 models Ranking Tables below.

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Brunei Full Year 2014: Toyota Vios & Mitsubishi Mirage on top

Toyota Vios Brunei 2014The Toyota Vios has now been the best-selling model in Brunei for at least 4 years.

* Now updated with the Top 40 All-brands and Top 20 models *

Thanks to Proliance I can now share with you a lot more detail about the Brunei new light vehicle market for 2014. Sales are up 12% on 2013 to 20.854 registrations, a higher figure than that published earlier by the Brunei Automobile Traders Association at 18,131. Toyota outpaces the market with sales up 22% to 4.744 and 22.7% share, increasing the gap with #2 Kia (-10%) while Mitsubishi jumps 3 spots year-on-year to third place thanks to deliveries up 42%. Below Nissan at #4 (+1%), Suzuki (-22%) and Hyundai (-16%) hurt. Chevrolet (#8) and BMW (#10) are the only non-Asian manufacturers in the Brunei Top 10 this year, whereas Chinese Geely (#13), Chery (#16), Great Wall (#17) deliver impressive results.

Geely Panda Brunei 2014The Geely Panda ranks #15 this year, selling more than any other Chinese brand.

Model-wise, the Toyota Vios remains the favourite by far with just under 10% market share, followed this year by the Mitsubishi Mirage at 5.8% and Kia Cerato at 5.2%. Notice also the Mazda2 at #6, the Nissan Almera at #9, Hyundai i10 at #11, Mitsubishi Attrage at #14, Geely Panda at #15 and selling on its own more than any other Chinese brand, and the Chevrolet Sonic being the only non-Asian nameplate to find its way inside the 2014 Brunei Top 20…

Previous year: Brunei Full Year 2013: Toyota and Kia on top again

Two years ago: Brunei Full Year 2012: Market highest in 5 years

Full Year 2014 Top 40 All-brands and Top 20 models below.

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Uruguay Full Year 2014: Chevrolet #1, Suzuki Celerio best-seller

Suzuki Celerio Uruguay 2014Uruguay is the first country in the world to crown the Suzuki Celerio

* Now updated with the Top 10 best-selling models *

* See the Top 55 All-brands and Top 10 models by clicking on the title *

The Uruguayan new car market struggles in 2014, down 8% year-on-year to 52,678 registrations. Chevrolet keeps the lead of the brands ranking despite sales down a very harsh 27% to 6,353 units and 12.1% – down for 25% share in 2010. This year’s winner is without a doubt Suzuki, increasing its deliveries by an excellent 50% year-on-year to 4,937 and 9.4% share in 2nd place vs. 5th and 5.8% in 2013, thanks to the arrival of the new generation Celerio which has become in the space of one year the best-selling nameplate in the country. Suzuki has also been very reactive in its Uruguayan product launches, for example making the new generation Alto K10 available here only two months after its launch in India where it is imported from. As a result Volkswagen (-23%), Fiat (-7%) and Nissan (-18%) all lose one spot whereas Renault (+16%) is up three to #6.

BYD New F3 Uruguay 2014. Picture courtesy of autoblog.com.uyThe BYD F3 is the 7th best-selling nameplate in Uruguay in 2014.

One of the particularities of the Uruguayan car market is exceptional strength of Chinese manufacturers, holding 22.2% of the market in 2014 (vs. 23.1% in 2013) which is a world-best outside China. No less than 24 Chinese carmakers appear in the 2014 Uruguay sales charts out of 55 brands in total. Chery is the most popular once again but sees its sales drop 20% to #8, whereas BYD almost doubles its deliveries to #10 (+93%), ahead of FAW (#12), Geely (#14), Lifan (#18), Great Wall (#19), Dongfeng (#21), JAC (#22), Chana (#23) and Gonow (#26). These are not insignificant as a brand like BYD outsells Ford, Toyota, Citroen, Mitsubishi and Kia here…

VW Gol Uruguay 2014The VW Gol is the #2 best-seller in Uruguay.

Thanks to www.autodata.com.uy and www.autoanuario.com.uy I can now share with you the 10 most popular nameplates in Uruguay for the Full Year 2014 and it paints a completely different picture year-on-year. Boosted by the new generation, the Suzuki Celerio sees its sales rocket up almost 3-fold to 2.014 units, enough to top the overall sales charts above the VW Gol and Suzuki Swift. Leader in 2013, the Chevrolet Spark tumbles down to #5 this year, while the Chery QQ is the best-selling Chinese model in Uruguay once again at #4 with 2.9% market share, followed by the BYD F3 at #7 and the BYD F0 at #8, both at 2% share.

One year ago (models): Uruguay Full Year 2013: Now with Top 10 best-selling models

One year ago (brands): Uruguay (brands) Full Year 2013: One in 4 new cars is Chinese

Full Year 2014 Top 55 All-brands and Top 10 models vs. Full 2013 figures below.

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STRATEGY: Is Africa the new China?

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.

– – –

Moldova April 2015: Chevrolet Aveo up to #2

Chevrolet Aveo Moldova April 2015Chevrolet Aveo

* See the Top 10 best-selling models by clicking on the title *

Based on data communicated by Central Europe specialists www.ceauto.co.hu, the Moldovan new car market is down a harsh 18% year-on-year in April to 346 registrations, bringing the year-to-date total to 1.109 units, down an even more depressing 29% on 2014. The Dacia Logan continues to dominate the sales charts with 10.1% share and this month the Chevrolet Aveo climbs back into 2nd place thanks to 5.2% share, earning itself a #3 spot year-to-date. The Toyota RAV4 at #5, Toyota Land Cruiser and Mercedes S-Class make a noticed appearance inside the Top 10.

Previous month: Moldova March 2015: Dacia Logan reclaims throne

One year ago: Moldova April 2014: Dacia Logan adds up to 20% share

Full April 2015 Top 10 models Ranking Table below.

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Georgia Full Year 2014: Photo Report and analysis

Toyota Corolla Georgia 2014bThe Toyota Corolla could be the best-seller in Georgia in 2014.

Today we get a more detailed insight into the car parc of Georgia, an ex-USSR state located in Caucasus with Russia to the north, Turkey, Armenia and Azerbaijan to the south and the Black Sea to the west. Thanks to Marco D’Abbraccio we can get a better understanding of this very secretive market. With Full Year 2014 sales estimated by LMC Automotive at 5.500, this is a very limited market from where no official sales data has seeped through so far. Its location at the crossroads of Eastern Europe and Western Asia transpires in its car parc.

All Photos below © Marco D’Abbraccio

1. Ford Taurus Tbilissi policeFord Taurus Interceptor Tbilissi Police

The Georgian car parc is a unique mix that reflects various economic ties with neighbouring countries. As it was the case in Eastern Russia, a large part of the Tbilissi car landscape is composed of affordable right-hand drive used imports from Japan coming through Georgia via beforward.jp, with the Toyota Ist and Mitsubishi Delica among the Top 5 most common cars there, used imports from Europe notably the Opel Astra and Vectra, and high end Mercedes from the 1990s as well as luxury SUVs.

2. Fiat Linea Georgia 2015Fiat Linea

As far as new cars are concerned, our bet on the title of 2014 best-seller in Georgia is on the Toyota Corolla produced in neighbouring Turkey and therefore imported with ease into the country. Interestingly there doesn’t seem to be that many more successful Turkish models, apart perhaps from the Fiat Linea pictured above. The Skoda Octavia could also compete for the #1 spot, making Georgia lean towards Eastern Europe, and the Toyota Land Cruiser is also a contender, this time linking Georgia with such markets as Kyrgyzstan across the Caspian Sea or even Mongolia.

7. BMW X5 Georgia 2015BMW X5

Affordable SUVs such as the Kia Sportage and Hyundai Santa Fe are also popular, this time mimicking steppe trends and Azerbaijan best-sellers, with which Georgia shares a border. Some Iranian influence in the shape of a handful of Iran Khodro Samand taxis circulating in Tbilissi, as well as a pinch of Uzbek imports with (only a very few) Uz-Daewoo Nexia spotted by Marco achieve to complete a very multi-cultural new car landscape indeed.

3. Zhiguli Georgia 20154. Gaz 24 Volga 3Zhiguli and GAZ 24 Volga

One of the main learnings about Georgia is that although the countries keep strong ties with most of its neighbours, it has all but severed car communication with ex-ruler Russia. If a lot of Zhiguli and GAZ Volga can still be spotted – mainly outside of big cities – the proportion of Russian models in the Georgian new car market is close to zero…

4. Opel Vectra Georgia 2015Opel Vectra in Tbilissi, Georgia – April 2015.

Active manufacturers in the country that have developed a reasonable network of dealerships include Volkswagen, Hyundai, Kia, Toyota, Skoda and Nissan. As we have seen in 2012-2013, given the small size of the market a large government order can vastly impact the list of best-sellers. After the Transit, Ford looks like it has benefited from another group order in the form of Ford Taurus Interceptor used as Tbilissi Police cars. However this order is much smaller and doesn’t enable Taurus any claims to the #1 title.

6. Toyota Will in Bodbe5. Gaz M21 Volga 1956Toyota Will used Japanese import, GAZ M21 Volga

Other popular models include the Hyundai Solaris, Renault Logan and Nissan Micra/March. Many thanks to Marco D’Abbraccio for this detailed reporting on the Georgian car landscape. If you have access to official sales data for this country, please ensure you get in touch by commenting on this article.

Previous post: Georgia 2012-2013: Ford Transit dominates, almost no Ladas left

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STRATEGY: The growing power of Hispanic buyers in U.S. sales

hispanic-ad

Lindsay Chappell this week published a fascinating article on Automotive News USA about the growing power of Hispanic buyers in the U.S. market. I summarise it below, you can read the full article here: “Sales to Hispanics outpacing the market”

What’s the weight of Hispanic buyers in the U.S. market?

  • 54 million Hispanics are now living in the United States or 17% of the total population, predicted to grow to 130 million by 2060 or 30% of the total population.
  • Hispanic car buyers in the U.S. are driving overall market growth and could well be the auto industry’s leading growth engine for the next 20 to 30 years. In 2014 retail sales to Hispanic consumers rose 15% vs. 6% for the overall market (Source IHS).
  • Hispanic growth is now increasingly happening in the Midwest, not just traditional powerhouses California, Texas and Florida. The states with the fastest-growing Hispanic populations in the last decade were Alabama, Kentucky, South Carolina and Tennessee. U.S. cities of more than 200,000 people with the fastest-growing Hispanic populations were Charlotte NC and Raleigh NC.

Toyota Corolla USA January 2015. Picture courtesy of motortrend.comToyota has ranked as the top-selling brand among Hispanic consumers for the past decade.

Which brands are winning with Hispanic buyers?

  • The “Big Three” brands of Hispanic-market sales are Toyota, Nissan and Honda. Chevrolet, Ford and Kia follow.
  • Toyota has ranked as the top-selling brand among Hispanic consumers for the past 10 years and has created a dedicated corporate department to this population: the Hispanic Business Strategy Group. Hispanics purchased one of every 4 Corollas sold in the U.S. in 2014 one out of every 5 Lexus IS sold.
  • Nissan brought 3 of its successful Mexico dealership groups to the U.S. to operate stores in Los Angeles, San Francisco and Houston and improve the brand’s ties to Hispanic consumers. Nissan is market leader in Mexico with 26.2% market share, and hopes that retailers from there will strike a chord of familiarity and trust among U.S. residents who moved here from Mexico in recent years.
  • Honda is the No. 1 brand among Hispanic buyers in New York City and Los Angeles.
  • Among Hispanic buyers, the Chevrolet Silverado outsells America’s biggest-selling pickup, the Ford F series.

Hispanic market data

The challenges that come with the growing power of Hispanic car buyers

  • Many Hispanics need – or prefer – to speak Spanish. Many perceive themselves as Hispanic or Latino even after several generations of U.S. heritage, and they look for products and services that specifically address their Hispanic identity. This means additional language and cultural training for salespeople is required for regions not used to a strong Hispanic presence.
  • Last year, 21% of Hispanic vehicle purchases were for a “first vehicle.” For the U.S. as a whole, the figure was just 5%. This means brands get more chances to make first impressions, but dealers must woo uncommitted new buyers.
  • The average age of Hispanics today is 30, compared with 42 for non-Hispanic Americans, meaning a different approach is required to close the sale.
  • The perception of Hispanic consumers seeking entry-level vehicles is becoming out of date. Last year, 24% of Hispanic U.S. households earned more than $75,000, up from 14% in 2000.

Egypt April 2015: Hyundai ix35 up to #4, Speranza back in shape

Speranza Envy Egypt April 2015. Picture courtesy Instagram

For the first time since November 2013, Egyptian new vehicle sales decline year-on-year at -3% in April to 21.742 registrations, however the year-to-date total is still up by a dynamic 10% to 93.935 units. Chevrolet remains king of the castle by far despite sales down 9% on a year ago to 4.908 and 22.6% share, above Hyundai (14.3%), Nissan (10.2%) and Toyota (9.9%). Suzuki (+117%) and Mitsubishi (+119%) both double their deliveries year-on-year while Skoda is up 58% and 148% year-to-date. Thanks to sales down just 10%, Chinese manufacturer Geely is back up to #7 overall (vs. -50% and #10 so far in 2015) while fellow Chinese Speranza – a rebrand of bad mouthed Chery assembling cars locally – is back inside the Top 10 at #8 thanks to sales up 53% to 690.

In the models ranking, the Chevrolet TFR (aka D-Max) is settling comfortably in its throne with 8.7% share vs. just 6.5% for its archenemy the Hyundai Verna with the Nissan Sunny rounding up the podium as usual. Excellent performance of the Hyundai ix35 up 23 spots on March to 4th place overall and of the Mitsubishi Lancer EX staying at #5 vs. #17 over the FY2014. The Geely Emgrand 7 is back up 26 ranks to #6, the Suzuki Ciaz is stuck at an outstanding 12th position, the Speranza Envy (picture above) is up 25 spots to #13, the Chevrolet New Optra (aka Baojun 730) is up 27 to #22 and the Suzuki New Alto 800 shines at #25. In April we welcome the Ford Kuga at #55 and the Fusion at #84.

Previous month: Egypt March 2015: Suzuki Ciaz takes off

One year ago: Egypt April 2014: Chevrolet TFR and Hyundai Verna neck-to-neck

Full April 2015 Top 15 brands and Top 136 All-models below.

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Colombia April 2015: Kia Sportage on podium, market down 16%

Kia Sportage Colombia April 2015. Picture courtesy carsguide.com.auKia Sportage

* See the Top 5 best-selling models and Top 30 brands by clicking on the title *

Colombia is a new monthly update on BSCB, and after January up 5%, February down 4% and March up 2%, April sales tumble down 16% year-on-year to just 21.862 units, pulling the year-to-date total into negative at -4% and 90.703 units. 2015 may not be another record year for Colombian new car sales after all. The models rankings shows a rather unusual instability apart from the top 2 best-sellers – the Chevrolet Spark/Spark GT and Chevrolet Sail: the Kia New Sportage jumps to an outstanding 3rd position (vs. #29 in 2014) while the Kia New Rio is up to #4 vs. #19 last year. Over the first 4 months of the year however, Renault places 3 nameplates inside the Top 5: the Sandero (5.204 sales), Duster (3.905) and Logan (3.280).

JAC Veloce Cross Colombia April 2015. Picture courtesy latercera.comJAC is now the 2nd best-selling Chinese brand in Colombia below Chery.

Brand-wise, Chevrolet keeps the lead by far despite sales down 25% in April and 13% year-to-date, while Renault improves its share at -10% and +4% to 16.5%. Kia, Hyundai and Nissan follow but inside the Top 10 it’s Mazda (+27%) and Suzuki (+35% in April, +42% this year) that impress the most, while Toyota (-27%) and Volkswagen (-21%) are the worst performers so far in 2015. Chery remains the top-selling Chinese manufacturer at #12 in April (-32%) and #11 year-to-date (-9%) but Foton now follows (#13), overtaking JAC (#14) with Dongfeng at #16.

Previous post: Colombia Full Year 2014: Chevrolet Sail tops record market

Full April 2015 Top 30 brands and Top 5 models below.

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