Africa Used-Car ‘dumping ground’ Puts Motor Industry at Risk


The West used coal to power its Africa will never develop a sustainable motor industry as long as it remains a “dumping ground for substandard cars”, says Martyn Davies, head of the African automotive division at business consultancy Deloitte.

Car sales across most of Africa are dominated by cheap used vehicles from northern hemisphere countries. SA is almost alone in sub-Saharan Africa in barring the dumping of such vehicles, which sell for a fraction of the price of new ones.

The market for new cars in SA in 2017 was more than 360,000. In Nigeria, Africa’s biggest economy with a population nearly three times SA’s, the total was barely 7,000. In Kenya it was less than 12,000.

Unscrupulous exporters Davies said Africa was such an easy touch for unscrupulous exporters that it became the destination for many of the cars submerged by the devastating 2011 Japanese tsunami.

Instead of being crushed and recycled, they were dried out and shipped to African customers. Davies was speaking in Johannesburg on Wednesday at the launch of a Deloitte report on prospects for vehicle sales in East Africa.

He said the whole of Africa needed more industrialisation and the motor industry was an obvious place to start. But nothing could happen until there was a market for new cars. Nissan SA MD Mike Whitfield said some African governments were starting to recognise the need to limit “grey” imports, but it was a slow process.

Import restrictions were part of a Nigerian motor industry development strategy, but there had been little progress so far, particularly after falling oil prices in recent years slashed available funds for private and corporate vehicle purchases.

Plans of several multinational motor companies to manufacture vehicles in Nigeria have been on hold since the market collapsed.

Business Day

Posted by on Jun 23 2018. Filed under Business. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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