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New report signposts opportunity in Africa’s diverse aftermarket parts business

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New report signposts opportunity in Africa’s diverse aftermarket parts business

Africa is one of the last regions with ample room for growth of the ‘traditional’ automotive aftermarket

DUBAI, United Arab Emirates, September 3, 2021/APO Group/ —

A new report commissioned by Messe Frankfurt Middle East, organiser of Automechanicka Dubai (www.AutomechanikaDubai.com) – the largest international trade show for the Middle East and Africa’s (MEA) automotive aftermarket and service industry – signposts huge aftermarket potential in the African continent.

Produced by German consultants Africon GmbH, which supports international companies looking to expand their automotive businesses in Africa, the report identifies Nigeria and Kenya as key to unlocking the continent’s automotive aftermarket potential and the individual characteristics needed to succeed in each national marketplace.

The report points to a resurgence of international interest in the African market, which boasts one of the world’s fastest-growing populations, with the United Nation’s 2021 population estimates putting Africa at 1.374 billion.

“Every year, more people are entering the labour force,” says the report. “Though this development poses significant risks in terms of the need for job creation, it also drives the growth of an emerging middle class.”

And while motorisation rates across the continent remain comparatively low though expanding, Africa could prove a survival bastion for the conventional aftermarket market. “As the sector is under pressure in many parts of the world due to peaking vehicle fleets and technological disruptions, Africa is one of the last regions with ample room for growth of the ‘traditional’ automotive aftermarket,” says the report. 

With an ageing fleet requiring larger maintenance efforts and electric vehicles unlikely to gain significant short to medium-term market shares due to the continent’s infrastructure constraints, the aftermarket remains buoyant.

The report singles out Nigeria, where 12 million vehicles are on the road, and Kenya, with a national fleet of two million (almost two-thirds of which are more than 15 years old) as nations with the highest promise in “the last underexplored market”. Both countries have the largest automotive aftermarkets in West and East Africa but require different approaches to access the potential.

“Though precise numbers are difficult to come by, the Nigerian parts market overall might stand at approximately US$4 billion per year. In Kenya, the total might stand at around US$500 million,” says the report.

Though there is a fledging parts manufacturing sector in Kenya, Africa remains largely reliant on imports to keep its fleets moving. Kenya is also emerging as a trans-shipment base to neighboring countries including Uganda and Rwanda.

“This makes Kenya an interesting regional hub for the aftermarket,” says the report – citing Dubai-based trading companies as key suppliers making the emirate the second most important parts supplier to Kenya after China. Nigeria, which does not have a home-grown manufacturing sector, is import reliant, with many turning to Middle Eastern suppliers and leading both countries to develop e-commerce capabilities.

“Both countries certainly do offer opportunities,” says the report. “For many global players in the aftermarket, the key first step to realising these is to decide to start engaging with these markets more actively.”

Messe Frankfurt Middle East believes its Automechanika Dubai exhibition, the 18th edition of which will run at the Dubai World Trade Centre from 14-16 December 2021, will serve as an aftermarket supply superhighway to African growth potential.

“To help facilitate this continental trade, the exhibition features a dedicated AfriConnections platform which connects African buyers with global suppliers,” explained Mahmut Gazi Bilikozen, Automechanika Dubai’s Show Director.

“Engaging with the market means meeting the key African importers and future business partners who attend Automechanika Dubai to seek out business opportunities and stay ahead of the latest market trends. The show is a gateway to a market ripe for exploration via Dubai and the Middle East.”

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