African car, truck market doubles by 2027 – IHS

A new analysis of future automotive demand in Africa, released in London by the IHS research group penultimate Monday, suggests there exist significant growth opportunities on the continent over the next number of years.

Demand for new light vehicles, with a gross vehicle weight (GVW) of up to six tons, has consistently reached more than 1.6-million units a year since 2012, and is forecast to grow to almost 2.7-million units a year by 2027, says IHS Automotive.

For medium and heavy trucks and buses, volume is forecast to almost double between 2012 and 2027 even as numerous factors are driving this growth, says IHS Automotive. While economic development is driven by agricultural exports, mining, investment in infrastructure and foreign direct investment, regional integration is seeing a positive evolution in trade relationships.

Key automotive specific factors are fuelling this growth as well – including the fact that several African governments led by South Africa and followed by countries in North Africa, are implementing automotive industry development plans in an attempt to spur on employment and economic expansion.

Also, the majority of African countries are looking to restrict or ban used vehicle imports of a certain age, especially vehicles that fail to pass basic safety and environmental standards tests. This development is expected to result in significant opportunity for new-vehicle sales in the region, states the IHS report.

South Africa, Algeria Continue to Lead “From a light vehicle perspective, just a couple of countries in Africa are expected to see double-digit annual growth by 2027,” says IHS Automotive light vehicle sales forecast senior analyst Walt Madeira.

“While volumes continue to be small in most countries, Nigeria is a notable exception, with a double-digit growth rate and volume forecast to about 260,000 units in 2027.”

Current new vehicle sales are estimated at around 100,000 units a year. So far, South Africa has ranked as the single biggest market on the continent, according to IHS Automotive. This continues to be the case.

In terms of current market size, South Africa leads, with Algeria close behind, both with more than 500,000 vehicles projected to be sold a year by 2027. “However,” Madeira points out, “we expect South Africa’s share of the market in Africa to gradually decrease from almost 40% in 2011 to 32% in 2027, as other countries, including Nigeria and Angola, show more pronounced growth.” With Kenya in the top three markets for medium and heavy trucks and buses, there is a slightly different picture in terms of market growth, according to IHS Automotive, with East Africa’s Kenya joining the leadership ranks by volume of new vehicles expected to be sold.

“Kenya is expected to show the most pronounced growth among African countries, quadrupling in size between 2012 and 2027,” said IHS Automotive commercial vehicle forecasting global director Andrej Divis. “With that, Kenya will round out the top three markets in terms of annual volume, joining Algeria and South Africa.”

MIKE OCHONMA