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Automotive Markets and Financing in Africa—Kenya and Nigeria : West and East Africa Expected to Become the Fastest-Growing Vehicle Markets by 2030
This market insight provides a consolidated overview of the economic climate and the automotive and vehicle financing markets of Nigeria and Kenya. The study looks into trends driving sales and leasing and the associated behaviour of buyers, while discussing macroeconomic challenges related to the wider economy and banking sector. It examines new car sales figures, the top-selling vehicles, and the effects of the secondhand market in each country. It looks at the banking sector in each country and discusses how policies affect vehicle financing.
This market insight provides an aggregated overview of the economic climate and the automotive and vehicle financing sectors in both Kenya and Nigeria. As relative economic and political stability are achieved in Africa, international companies are establishing operations in countries offering the greatest growth. With strong fundamentals and expanding populations, Nigeria and Kenya represent key regional hubs for West and East Africa, respectively.
The implementation of industrial policies is fostering investment in assembly plants in Nigeria and Kenya, which is critical to providing competitively priced vehicles while developing industry. The new car sector does, however, face a number of challenges that hinder its growth
New car sales in relation to population size are low when compared with the developed world, at new car per every people in Nigeria and 1 per in Kenya; however, forecasts suggest that West and East Africa will become the fastest-growing car markets worldwide by 2030. As GDP per capita reaches the tipping point, it is believed that car sales will increase considerably — Nigeria is nearing this point, but Kenya continues to lag behind. This insight examines sales figures, top-selling vehicles, and the secondhand market. The Kenyan banking sector is well-established and stable, yet innovative in the introduction of “easy-pay” products that have been recognised internationally.
The Nigerian banking sector encounters a number of challenges with concerns relating to corruption, regulation, and non-metered fiscal policies. Banking profits in both countries have grown, with strong numbers in leading Nigerian banks; however, an economic decline that began in late 2015 in both Nigeria and Kenya is negatively impacting sector performance. Vehicle financing trends differ significantly, with penetration levels in Kenya far outpacing those in Nigeria. The underdeveloped banking culture in Nigeria combined with interest rates rising above % are creating cause for concern. Government initiatives are expected to reverse this trend, yet regulatory concerns continue to delay progress.
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