African Auto Drivers May Soon Be Buying Local
Nairobi, the capital city of Kenya

New vehicle ownership is often viewed as a leading indicator of a growing middle class. Despite sub-saharan Africa’s burgeoning middle class of roughly 300 million people, imported used vehicles have continued to dominate an outsized portion of the market. With only 1.2 million new cars being registered in Africa in 2014, car manufacturers see the budding market as one of the final frontiers for growth. Until now the facilities of major carmakers on the continent have been mostly limited to South Africa. However, Ford, Renault-Nissan, Kia Motors, and Volkswagen have all announced plans to begin assembling vehicles in Nigeria.

Meanwhile, a growing number of companies across the continent are gearing up to offer consumers the opportunity to “buy local”. In December 2014, Nigeria’s Innoson Motors unveiled a new brand of passenger vehicles. This year, a privately-held company named Kantanka is expected to introduce a new 4×4 designed and manufactured in Ghana. In East Africa, Kiira Motors Corporation (KMC) recently announced plans to build 7,000 units per year of its lithium-battery-power sedan. The Ugandan firm’s flagship petrol-and-electric hybrid car, the Kiira Smack, will retail for US$ 20,000 and has received financial support commitments of $43.5 million from the Ugandan government. Each of these three firms has plans to export regionally. Enthusiasm for locally produced vehicles over foreign brands will go a long way towards determining just how viable these businesses can become.

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