‘Immense potential’ for aftermarket suppliers of two African countries as car and spare parts imports ‘soar’; A report by the German consulting company Africon indicates high demand from the USA, Europe and the UAE – the host of Automechanika Dubai (www.AutomechanikaDubai.com) 2022
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A new technical book produced by Africon, a German consulting firm that supports companies around the world in expanding their business in Africa, has outlined the main points related to the automotive markets in Ghana and Côte d’Ivoire.
The data includes details of an increase in the number of imported cars, as well as the growth of the aftermarket in the two countries, making the pair increasingly important in the African automotive aftermarket.
The paper notes that while Ghana and Côte d’Ivoire are smaller markets than African heavyweights such as Egypt, Nigeria and South Africa, they have huge potential.
Total car imports to both countries have risen sharply over the past six years, with the value of light cars in Côte d’Ivoire more than doubling and heavy cars nearly doubling since 2016.
Growth was slightly slower in Ghana, but the numbers remain impressive, averaging 11 percent and 10 percent per year for light and heavy vehicles, respectively. For both countries, the majority of total shipments came from the US, UAE and Europe.
Similarly, in Côte d’Ivoire, despite the economic impact of the COVID-19 pandemic, the growth of the country’s new passenger car market has been relatively strong in recent years, with volume increasing from 7,500 in 2012 to a relatively constant over 10,000 units in the last few years. In total, there are about 800,000 vehicles on the country’s roads (excluding trailers, two- and three-wheelers), while Ghana has a population of about 1.2 million.
“Spare parts markets are growing equally for both countries,” the official document says. “While Ghana’s spare parts market is roughly double that of its French-speaking neighbour, Côte d’Ivoire is fast catching up with an annual increase in imported parts of almost 20 per cent between 2015 and 2021. In Ghana, growth is at “only” 10 percent per annum over the same period.”
Africon believes that as the size of the market grows, these two countries are likely to be the focus of parts manufacturers, while the localization of distribution infrastructure is likely to increase. As it stands, both Ghana and Côte d’Ivoire have a very similar distribution structure, with global parts manufacturers supplying through international trading firms, often based in the UAE or the EU.
E-commerce still plays a fairly limited role in both countries, the paper said. Foreign online platforms are sometimes used to import spare parts, especially due to greater trust in foreign sources. For domestic resale, the vast majority of buyers prefer to “look and feel” the products before ordering. In addition, the logistical challenges of building robust e-commerce systems have yet to be resolved. However, many stakeholders believe in future solutions to these challenges and are increasingly keen to explore opportunities in the digital space in Africa.
“While only a very few global parts manufacturers have their own personnel and structures in the region, they should and will be getting closer to their customers in this regard,” the paper continues. “The importance of e-commerce parts sales and other digital automotive services (repair and maintenance, insurance, ride-hailing services, etc.) may well increase to significantly increase convenience for local drivers and vehicle owners. To gain a foothold in these promising future markets, local and global companies should take advantage of the early movers.”
With offices in Côte d’Ivoire, Ethiopia, Ghana, Kenya, Nigeria, South Africa and Tanzania, Africon will be participating in the annual Automechanika Dubai exhibition from November 22 to 24 at the Dubai World Trade Center in the UAE.
Despite the challenges of COVID-19, last year’s event brought together 20,574 visitors from 129 countries, 578 exhibitors from 47 countries and 12 official country pavilions to reconnect and engage in serious business conversations, sign new deals, explore new partnerships and stay up to date on the latest market trends.
The show’s organizer, Messe Frankfurt Middle East, expects more than 750 exhibitors this year, a 30 percent increase compared to the same period last year.
Distributed by APO Group on behalf of Automechanika Dubai.
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