Export Used Cars To Africa: Importers in Africa of used Cars Do Thriving Business
Second-hand cars have been finding their way to African markets for many years. The market for used cars in Africa is poised for further growth as Africa is by far the least motorized region on the planet with only 44 registered vehicles per 1,000 inhabitants. The global average, on the other had, stands at 180 vehicles per 1,000 inhabitants – which reflects the tremendous growth potential in the market for used cars in the African market in the future. Demand for used cars in many African countries is soaring due to an emerging African middle class and increasing levels of disposable incomes.
Nigeria is the biggest market for used cars in Africa, and is also one of the most affluent in the Sub-Saharan region.
The country boasts a population of over 140 million with approximately 40 million currently belonging to the rapidly emerging middle class. While new car sales are slowly picking up across the country, used sales still best those of new vehicles by a ratio of 4:1.
Apart from South Africa and the North African countries the rest of the continent is poised for a major increase in demand for second-hand cars over the coming years. It is estimated that by 2030 car ownership will more than double to reach a healthy number of 90 million registered vehicles.
In East Africa, more than 96 per cent of vehicles imported into Kenya are used ones. Its neighbour, Ethiopia, along with Nigeria, is one of the largest importers of used vehicles globally. Given the current limited disposable income, Ethiopia’s automotive market is dominated by second-hand imported vehicles – particularly commercial vehicles. Commercial vehicles are Ethiopia’s second most valuable import overall, worth over US$850 million. Approximately 85 per cent vehicles in Ethiopia are second-hand imports, of which almost 90% are Toyotas, imported primarily from the Middle East – mostly from Dubai.
Every year, around 800,000 used cars are exported to the top ten sub-Saharan African importers from Japan, EU and the United States. Japan, alone, exports used vehicles to at least 13 African countries via the UAE. Its market is spread across eastern and southern Africa with Kenya, Uganda and Tanzania having a large user base.
The European Union is the second largest exporter of used vehicles to Africa, supplying to at least 15 countries in North Africa. Germany is a major exporter of used cars to Africa garnering over half of EU car exports to Africa (53 per cent).
Region-wise, West Africa is clearly ahead of the rest of Africa as it imports over 900,000 used cars every year, which is approximately 70 per cent of total imported vehicles in Africa. Central Africa contributes the least to used car business and imports an average of 65,000 vehicles per annum. Interestingly, it is slightly higher than what Kenya, alone, imports in one year on an average.
Japanese Used Cars
On one hand, we have Africa, the biggest consumer of second hand cars in the world, and on the other hand we have the Far East. Japanese used car exporters have been successful in meeting Africa’s need for used cars. It is indeed a very agreeable trade agreement between Japan and Africa.
Not only is Africa, as a continent, the largest importer of used cars, but owing to the global crisis that hit most parts of the world in 2008/2009, Kenya toppled Chile and Russia from the top, to become the largest importer of Japanese used cars in Africa and the world.
Owing to the lack of parts support and dealership networks, the top priority of Africans when buying used cars is reliability – and that means they want Japanese cars. Even though Europe is much closer to Africa (and, therefore, shipping used cars should be cheaper), Japanese cars are still relatively rare in Europe. In North America, Japanese cars are common, which is why so many are brought over from the USA.
When it comes to the types of cars, unsurprisingly, Toyota and VW dominate both the new and used car space, capturing more than 35% of the new and used passenger financed volumes.
Most models of Toyota are particularly popular in Africa – including the Aygo, Corolla Quest, Etios, Avanza and Yards, which boasts a good reputation and they’re perceived to be reliable and easy to maintain.
Nigerian Used Car Market
Large numbers of used cars are smuggled into Nigeria from Benin and Togo. Car importers in Benin legally import used cars from Europe, but then export them illegally to Nigeria. In the process, used car importers in Benin and Togo are making good profits by servicing the demand for used cars in Nigeria. Most cars imported into Togo and Benin are finally destined for Nigeria. “The price of cars will go up, and the smuggling will increase. There are 200 roads through the bush to come to Nigeria, the borders are porous,” said one car dealer in Benin.
The reason for the rise in this illegal trade in used cars is the high import duties which Nigeria imposes on the importation of second-hand vehicles. Moreover, Nigeria has banned the import of vehicles older than 10 years.
All in all, the used car business in Africa will continue to grow as more and more Africans enjoy the benefits of economic prosperity sweeping across Africa and benefit from rising disposable incomes and move to upgrade their lifestyles.
Africa Business Pages has compiled the Africa Car Importers Directory – a special directory of importers of cars in Africa – with special emphasis on used car importers – that is now available for download and provides a comprehensive list of used car dealers in Africa.
