Business Opportunities in Africa Automobile Markets
There are huge business opportunities to exploit in
Africa’s vehicle market. The billion dollar industry is huge accommodating
millions of vehicles. Nigeria is a major player in used and new vehicles. The
used vehicles popularly known as Tokunbo dominate the vehicle market.
Other industries that thrive because of the trade are
vehicle spare parts business. Others include automobile servicing, fuel stations,
lubricant and accessories. Investors can earn huge money in the fast growing
industry. Here are some lucrative business opportunities in Africa’s automobile
business.
Huge
demand
The huge demand for vehicles is because of the rapid
growing population. Over 60% of people in Nigeria are teenagers or young
adults. Other reasons are urbanization and increased spending power of
individuals.
Across Africa 40% of the population live in urban areas.
In 2018 fifty million people live in fifty major cities across Africa. That is
why the car import business is booming in Africa.
The
economy
The economy is another reason for the surge in vehicle
sales. Apart from foreign direct investment many economies in Africa are
growing. This is because of good policies in some countries and focus on
manufacturing and agriculture.
Cost
effectiveness
Many African countries don’t assemble cars so they rely
on imports for vehicles. However the Importation of second hand or used
vehicles is cost effective. The market
is an equal opportunity market that caters to both high net worth and middle
class.
New vehicles account for 30% of imports while used
vehicles record 70%. Major attractions are used vehicles from Europe, Canada
and United States of America. Most new cars come from Japan, china and South
Korea.
Do you know that in Nigeria vehicular traffic accounts
for ninety percent of pedestrian movement? This is because there is no functional
rail system within urban areas of Nigeria.
Therefore a huge population relies on mass transit buses
or personal vehicles. The middle class in Nigeria is the driving force for used
car sales. However only a fraction own vehicles and the rest use mass transit
buses.
Consumer
trends
New cars have found a favorable market in Nigeria. Luxury
cars are in huge demand and are evident in auto dealers like Cosharis Motors.
Popular luxury vehicles they favor are G Wagon, Bentley, Mercedes, and Porsche.
There is also a huge population driving Toyota, ford, Peugeot.
Waste
Metal Recycle
There are many markets dedicated to waste metal or junk.
Metal from old vehicles are used in the iron and steel industry.
Others are refurbished, recycled or repurposed into other
items. The iron is also used to make new products like iron gates, chairs, carts.
The scrap metal attracts good prices per kilogram.
Uses
of waste iron
- Refurbished
- Recycled
- Repurposed
- Made into new products
Auto
repair shop
Another lucrative industry to consider is auto repairs.
Because of the huge number of used vehicles in the country they tend to have
problems. Other reason includes bad roads, poor maintenance culture and
accidents.
Many of the used cars imported into the country are
accidental or auctioned. Many have some mechanical fault or physical damage.
Auto mechanics are very busy and earn money daily providing repair work.
Automobile
servicing
Automobile servicing job description includes wheel
alignment and balancing. Others are engine oil change, tire change, radiator
repair. The service center could provide car washing facility, workshop services.
Spare
parts business
The spare parts business is very lucrative in Nigeria.
This industry is dominated by markets such as Ladipo, Onitsha market, trade
fair complex.
Majority of the spare parts are sourced from damaged
vehicles. Top importers also bring in products from Asia and China. Others
bring in accidental vehicles to dismantle for spare parts.
