Vehicle markets to double in Africa by 2027
Industry analysis promises significant growth, and big expectations for the role of Kenya’s market
An IHS Automotive analysis of future automotive demand in Africa suggests significant growth opportunities and ‘pronounced promise’ on the continent, which the industry considers the ‘final automotive frontier’.
Demand for light vehicles of up to 6t has consistently hit more than 1.6 million units since 2012 and is forecast to grow to almost 2.7 million units sold annually by 2027, while for medium to heavy trucks and buses, the volume is forecast to almost double between 2012 and 2027.
“From a light vehicle perspective, just a couple of countries in Africa are expected to see double-digit annual growth by 2027,” said Walt Madeira, senior light vehicle sales forecaster at IHS Automotive.
“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,” he said.
South Africa remains the single biggest market on the continent, but in terms of current market size, Algeria comes close behind, with the expectation that more than a half million vehicles will be sold annually in the market by 2027.
“We expect South Africa´s share of the market in Africa to gradually decrease from almost 40% in 2011 to 32 percent in 2027, as other countries including Nigeria and Angola are showing more pronounced growth,” explained Madeira.
“Kenya is expected to show the most pronounced growth among African countries, quadrupling in size between 2012 and 2027,” added Andrej Divis, global director of commercial vehicle forecasting at IHS Automotive.
“With that, Kenya will round out the top three markets in terms of annual volume, joining Algeria and South Africa.”
According to the report, while economic development is stemming from agricultural exports and mining of natural resources, investment in infrastructure, foreign direct investment and regional integration is resulting in evolving trade relationships.
The majority of African countries are also looking to restrict or ban used vehicle imports of a certain age that fail to pass basic safety and environmental standards tests, resulting in significant opportunities for auto sales in the region.