Should African countries take a policy decision to ban pre-owned vehicle imports, an additional two-million new vehicles could be sold on the continent, which would warrant investment into new manufacturing capacity, said Toyota Wessels Institute for Manufacturing Studies ambassador and Gordon Institute of Business Science Associate Professor Justin Barnes.

During an address at the Manufacturing Indaba, in Sandton, on July 15, he presented research findings that Africa’s population earning $10 000 a year – those able to afford a new vehicle – was likely to grow from 78.9-million currently to 203-million by 2050.

About 1.2-million new vehicles were sold on the continent in 2022, while 983 000 used vehicles were imported, particularly in Angola, Kenya and Nigeria.

Should the status quo of African consumers buying used imported vehicles on such a vast scale continue, 3.4-million new vehicles will be sold in Africa in 2050; however, in a no-used-vehicle import situation, new-vehicle sales could reach 5.3-million units by 2050.

This meant there was potential for another 2.2-million new vehicles to be sold every year and stimulate local manufacturing demand, if countries were to decisively take steps against used vehicle imports, Barnes stated.

In a 5.3-million new-vehicle-sales-by-2050 scenario, it justifies the investment into 100 new completely knocked down manufacturing plants producing up to 60 000 units a year, for an investment of $800-million.

The scenario opens the possibility for 1.2-million new jobs to be created and for Africa to become part of the global supply network in a meaningful capacity, backed by component localisation.

“For this level of stimulated demand, serious industrial policy decisions will need to be taken, similar to the steps taken by China to expand its manufacturing capacity,” Barnes stated.

To ensure affordability of the new-vehicle purchases as opposed to used-vehicle imports, Barnes said innovative financing approaches should be considered by manufacturers, but added that the sheer scale of manufacturing could ensure economies of scale and ultimately lower costs for consumers – as China had achieved with its affordable ranges of vehicles flooding global markets.

Barnes said the termination of used-vehicle imports could spark the development of a continental automotive industry, but coordination in respect of regional supply chains and market access between countries would be crucial for success.

He added that most new vehicles were bought by corporates and governments in Africa, not private individuals, with market demand being influenced by taxes, vehicle use fees and the availability of vehicle finance.

Historically, grey imports and pre-owned vehicle imports have significantly impacted on the demand for new vehicles.

Countries such as South Africa, Egypt and Morocco do not allow used-vehicle imports, which has led to higher new-vehicle sales in these countries.

“A positive scenario with asset-based vehicle finance and stimulated economic activity could lead to a six-million new vehicle market by 2050, supported by a viable automotive ecosystem with depth of capability and market potential,” Barnes concluded.