Asian OEMs are making rapid inroads into the African market as infrastructure developments present new growth opportunities for them.
Rising urbanisation is encouraging unprecedented infrastructural developments in Africa, especially across the construction, oil and gas sectors.
These factors are strengthening the regional market for commercial vehicles (CVs) like rigid trucks and flatbed trailers.
Asian original equipment manufacturers (OEMs) such as Isuzu, Mitsubishi, Dongfeng, Sinotruk, Tata and Ashok Leyland have started making rapid inroads into the African market and currently account for 73.1% of the total CV market.
As these foreign OEMs continue to offer value trucks built for local conditions and customer preferences, so shall the market competition intensify.
“There is significant opportunity for OEMs to leverage their already existing platforms in emerging markets, such as China and India, to build synergies across these regions and Africa for higher operational efficiency and lower costs,” said Marshall Martin, industry analyst, Frost & Sullivan Mobility.
“Meanwhile, regional manufacturers will get a huge boost from the growing emphasis on urban transport, along with government incentives to produce vehicles locally,” he added.
The market is expected to grow from 317,533 units in 2016 to 538,774 units in 2025, at a compound annual growth rate (CAGR) of 6.1%. South Africa, with 53%, is the largest contributor to the CV market in Africa. However, Nigeria, Kenya and Morocco are expected to be the fastest-growing markets and the only ones to increase their share by 2025.
“Other CV technologies such as advanced telematics are expected to be highly popular in regions around South Africa, thereby encouraging investments and partnerships in the African market,” noted Martin,
Martin concluded by saying that the demand for cleaner air in cities could create opportunities for greener public transport such as compressed natural gas (CNG) and electric buses.
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