Slide of the month (SOTM) January. The market for commercial vehicles in Kenya

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Over the last couple of years, africon has implemented a vast range of projects in the automotive sector. Some of the projects have tasked us with analyzing the market for automotive components like filters and spark plugs, among others, for commercial and personal vehicles. We have conducted more than a hundred interviews with senior level industry players, parts distributors and automobile traders in different countries in Africa.

In East Africa, Kenya has been the automotive hub. In the last two and a half years, approximately 33,000 commercial vehicles have been sold in the country. Light- medium trucks are the leading segment in commercial vehicles, accounting for almost 11,000-unit sales over the past 2.5 years. Even though sales have been affected by the coronavirus pandemic, the industry shows positive signs of recovery. Kenya’s commercial vehicle assemblers might have even increased their output in 2020 compared to the previous year. Additionally, the government and stakeholders are still working on positive automotive policy adjustments. The sector in Kenya has space for significant growth, opening interesting opportunities for international firms.

In the project here, africon was able to provide market transparency, in-depth data and strategic recommendations for future sales efforts in the region.

Get in touch if you would like to know more about opportunities in Africa´s automotive markets.

Read other related SOTMs

Slide of the month (SOTM) October. Automotive industry in sub-Saharan Africa

Slide of the month (SOTM) June. Automotive Kenya vs. Nigeria

Read previous SOTMs (Slides of the month) here.

Slide of the month (SOTM) December. The food, beverage and tobacco manufacturing industry in Nigeria

Slide of the month (SOTM) November. The construction industry in Africa

Slide of the month (SOTM) October. The meat & fish sector in Nigeria

Slide of the month (SOTM) September. The soft drinks market in Kenya

Slide of the month (SOTM) August. Steel demand in Africa

 

Slide of the month (SOTM) July. The future of Africa’s independent automotive aftermarkets

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africon recently presented at Messe Frankfurt Middle East: Automechanika Dubai’s webinar titled “Africa’s independent aftermarket (IAM) – a look at the current situation and future potential”.

In a webinar poll, they asked the 237 attendees from 65 countries if the African automotive aftermarkets will play an important role for their business in a post-COVID future. In total, more than 70% of the participants “strongly agreed” or “agreed”. The poll results show that there is indeed a significant interest in Africa. africon strongly believes in the African continent and with our role of bridging potentials, we are continuing to help reduce cost, risk and time for IAM companies.

The webinar is currently available on-demand for people to watch.

If you have any questions. Do not hesitate to contact us.

Read other SOTMs (Slides of the month) here.

Slide of the month (SOTM) June. Consumer goods across Africa

Slide of the month (SOTM) May. Glass production in Africa

Slide of the month (SOTM) April. The sugar industry in East Africa

Slide of the month (SOTM) March. The rope manufacturing industry in Africa

Slide of the month (SOTM) February. Obtaining finance in Côte d’Ivoire

 

 

Slide of the month (SOTM) December. Automotive market in Uganda

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The automotive aftermarket is one of the key sectors of opportunities in Africa – not just for Germany, but for many global automotive nations as well. However, many international automotive firms face challenges when doing business in Africa as markets function differently compared to other parts of the world – and within Africa itself. The typical route to market is one example: while consumers in markets like Nigeria tend to buy parts from retailers, consumers in some East African countries – like Uganda here – tend to go for the more convenient option of buying from workshops directly. This changes dynamics in decision making, of which automotive suppliers need to be aware to efficiently position their brands in the market.  

Slide of the month (SOTM) May. The aftermarket for commercial vehicles in South Africa

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Being Africa´s most developed country, the automotive aftermarket in South Africa presents itself with its unique profile, own challenges and opportunities: South Africa is one of the very few African countries with a relatively strong base of local automotive parts manufacturers. A vast variety of international brands have long set up shop, some established their own offices and warehouses. The local motor vehicle fleet of more than ten million is one of Africa´s biggest but has recently only grown very slowly. Together with a sluggish economy, the parts market has become relatively competitive with firms fighting hard for market shares.

The already existing volumes, together with a market that – in a global comparison – still has space for significant growth, open interesting opportunities for international firms.

Get in touch if you would like to know more about opportunities in Africa´s automotive aftermarkets!

Slide of the month (SOTM) February. Automotive parts imports in sub-Saharan Africa

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Automotive parts import Sub-Saharan Africa.

Let us look at the automotive market in sub-Saharan Africa narrowing down to the aggregate value of three main automotive service parts which are: Filters (consisting of air filters for internal combustion engines, as well as Oil or petrol filters for internal combustion engines), Spark plugs, and Brake parts. The total combined import value of these automotive parts in sub-Saharan Africa was $753 million in year 2017. Brake parts recorded the highest import value worth $388 million which is 52% of the total import value of the three selected automotive parts combined, while spark plugs were the least of the imports valued at $58 million.

Based on our analysis of the available data on automotive parts imports in sub-Saharan Africa, we found that South Africa, Nigeria, Angola, Kenya, and Ghana were the top five importers of filters, spark plugs and brake plugs into sub-Saharan Africa in the year 2017. South Africa being the largest market, accounted for 47% of these automotive parts imports worth $355 million, while Ghana being the fifth largest market was worth $21 million.

The major export partners were China, Germany, South Africa, Belgium and USA. However, the data from year 2007 shows that Germany was the largest exporter of these automotive parts to the Sub Saharan Africa region until 2013 when China took over as the largest exporter to the region. Brake parts were also the largest exports (of the three parts) from China and Germany while Filters were the largest exports from South Africa, Belgium and USA.

Slide of the month (SOTM) January. The automotive parts market in Nigeria

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SOTM. January

The Nigerian automotive industry appears to be an interesting market, as our research on the automotive parts market shows that the market size is worth USD 4.4bn or more.

The total vehicles in operation in Nigeria is currently estimated at 12.7 million, and Nigerian drivers spend an average of USD 350 on automotive parts per year.

Interviews conducted with various automotive experts in Nigeria also confirmed that the market for service parts accounts for the biggest share of the automotive market.

Slide of the month (SOTM) April. Motorcycles in operation in Egypt

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Let us look at the automotive markets in the areas of assembly machinery, engine filters, ignition products and general spare parts in countries like Nigeria in the West, Kenya and Tanazania in the East, Egypt in the North and South Africa in the South. Insights gathered cover areas such as vehicles in operation, spare parts markets, local vehicle assembly projects and key distribution firms. They also include companies ranging from major automotive OEMs such as Toyota, Isuzu, Hyundai and VW, to aftermarket players like BOSCH, Denso, NGK, Hengst, MANN-FILTER, Mahle and others.

Slide of the month (SOTM) October. Automotive industry in sub-Saharan Africa

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In 2017, we analysed the market for automotive filtration in Kenya and Tanzania in detail. During the project, 60 senior level industry players from authorities, key automobile traders and leading parts distributors, more than 300 consumers, around 70 workshops and 100 parts traders in Kenya and Tanzania were interviewed.

In terms of vehicles in operation (VIO), Kenya and Tanzania belong to the countries with the highest stock of VIO in sub-Saharan Africa (SSA). Through a fast-growing local assembly industry, Kenya promises to stay the local automotive hub in East Africa. This also reflects in a growing local spare parts industry ranging from automotive batteries to tires. Also the automotive market in Tanzania, with a first local assembly line for agricultural vehicles in place and various spare parts manufacturers operating successfully, promises to continue growing in the next years.

Apart from the activities in Kenya and Tanzania, africon has been active in the Nigerian automotive market since 2015. With the new insights from Kenya and Tanzania gathered in 2017, the africon expertise regarding the African automotive market grew decisively.

 

Slide of the month (SOTM) June. Automotive Kenya vs. Nigeria

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In two different projects, both concerning the automotive industry in Kenya and Nigeria, africon has been conducting more than 65 interviews with vehicle assemblers, coach builders, repair garages and distributors of vehicles. Aim was to understand the current maintenance of windscreens in Africa to develop a go-to market strategy for a leading adhesives company.

These interviews as well as the analysis of general market data shows that the size of the automotive market in Kenya and Nigeria is quite different, which comes naturally when looking at the size of the population (46,05 million in Kenya vs. 182,2 million in Nigeria). But the proportion of new vs. second hand vehicles is very much the same.

Having 75% and 80% of second hand vehicles cruising the streets in Kenya and Nigeria the market for spare parts as well as chemical materials needed in the repair sector – like adhesives, sealants, paints, etc – is huge.

 

 

Slide of the month (SOTM) April. Spark plug market Nigeria

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Within a large independent aftermarket (IAM) project in the automotive sector for Nigeria, africon GmbH had the chance to interview more than 50 experts and found that the IAM market in Nigeria is strongly dominated by fake products. A good example is the spark plug market where fakes in 2015 were at 65% but increased to almost 80% in 2016. According to an expert in the IAM market in West Africa, Chinese suppliers have lowered the quality of fakes to meet the lower buying power of Nigerian clients. The current market leader is NGK from Japan with a strong distribution by Asahi Brands. Other brands are distributed through various players e.g. Hydrotrans but also by OEMs e.g. Bosch.