Uganda Autos Report Q3 2012

• Publication date: June 2012
• Report size: 39 pages

Includes 3 FREE quarterly updates Uganda's new vehicle market is a tiny fraction of the total autos sector, with second-hand vehicles still the only affordable option for many consumers. Even then, sales of passenger cars are around two-thirds the volume of commercial vehicles, with buses comprising the lion's share as public transport is the most widespread means of getting around. According to the Total Industry Volum...

Includes 3 FREE quarterly updates

Uganda's new vehicle market is a tiny fraction of the total autos sector, with second-hand vehicles still the
only affordable option for many consumers. Even then, sales of passenger cars are around two-thirds the
volume of commercial vehicles, with buses comprising the lion's share as public transport is the most
widespread means of getting around.
According to the Total Industry Volume report, as reported by the Daily Monitor in April, car sales in
Uganda have been hit by slowed growth characterised by high inflation, currency depreciation and the
rising cost of doing business in the country.
Car sales in the first quarter of 2012 stood at 425, a drop of 17% compared with the same period last year,
when 513 were shifted.
The chairman of Uganda Motor Vehicles Importers Association, Nelson Tugume, told the Daily Monitor
the slump was down to a struggling economy. He said: 'Cars are not a life necessity so consumers can
postpone buying them to cater for basic needs.
'This is an economic problem. As long as the economy continues to struggle then car sales will be low.'
This defies signs last year that new vehicle sales were growing, albeit at a much slower rate. According to
the Uganda Motor Industry Association, sales of new vehicles for the first eight months of 2011 were up
3% year-on-year (y-o-y) to 1,785 units, compared with the 1,618 units sold the year before. As in other
countries in the region, the growth was spurred by a healthy construction sector, which generated demand
for trucks and heavy vehicles. The data show that out of the total vehicles sold, 984 were pick-up trucks,
while passenger car sales comprised 377 estates and 227 sedans.
There are positive signs for the industry, however. The Uganda National Roads Authority has announced
that construction of the US$350mn toll road connecting Kampala with Entebbe Airport will start in July
2012, reports Road Traffic Technology. Construction work on the 50km road, which is due to be
completed by July 2015, will be financed by China's Export-Import Bank. The road will facilitate
transportation between the capital city and the country's only international airport, as well as easing traffic
congestion on the existing road between the two locations.
Meanwhile, the rate of Ugandan economic growth is predicted to increase by 5.4% during FY2012/13,
reports Yahoo! News. The expected rise is attributable to projected government investment in
infrastructure, education, energy and transportation. The Ugandan government has also prioritised a
reduction in inflation to single digits following its rise to an 18-year high of 30.4% in October 2011.
According to local dealers, access to financing is boosting growth in the new vehicle market. Some banks
will finance a larger percentage of the cost of a new car than a second-hand one, as a new one will be less
of a risk. The Development Finance Company of Uganda Bank offers 100% financing for new trucks and
buses. However, the data show that bus sales have not spiked as expected in preparation for the phasing
out of 14-seater vans used as buses.
In the new car market, Toyota Uganda is the undisputed leader. In the first eight months of 2011, it
accounted for 718 of the 1,785 new vehicles sold, equal to a market share of around 40%. It was followed
by Motorcare Uganda with sales of 309 units and Skenya Motors with sales of just 34 units.
There is also a thriving motorcycle market in the country, which has attracted investment in local
production. In February 2011, the local distributor for Yamaha Motor motorcycles, Nile Fishing
Company, opened the country's first motorcycle assembly plant. The UGX18.8bn (US$7.5mn)facility
has a daily production capacity of 50 units, but the company plans to expand the plant by March 2013, to
have five assembly lines producing a total of 250 bikes per day. The first model to be built at the plant is
the Yamaha Crux, which is often used for commercial purposes, but other models will be added.
Meanwhile ,the first signs of a domestically designed car have come from a Ugandan university.
Makerere University's College of Engineering, Design, Art and Technology has unveiled its own electric
vehicle (EV), the Kiira EV, which has been developed and produced by students over a three-year period.
While the car meets the brief of showcasing local skills and innovation, BMI believes the country's
underdeveloped power generation capacity means it is unlikely that widespread usage of EVs will be a
viable option any time soon.

Passenger Car Industry in Uganda

Executive Summary .. 5
SWOT Analysis .... 7
Uganda Political SWOT 7
Uganda Economic SWOT .. 8
Uganda Business Environment ... 9
Global Overview . 10
Global Autos Update: End Of First Quarter Brings Both Positive And Negative Revisions As Key Trends . 10
Table: Passenger Car Sales (Units), Jan-March 2012 .. 10
Regional Market Overview .... 14
Currency And Security Issues See European Imports Winning Out .. 14
Industry Risk/Reward Ratings ... 16
Table: Sub-Saharan Africa Autos Risk/Reward Ratings 19
Macroeconomic Forecast Scenario .... 20
Despite Challenges, Robust Growth Ahead ... 20
Table: Uganda - Economic Activity, 2011-2016 . 22
Industry Forecast Scenario .. 23
Table: Uganda Automotives Historical Data & Forecasts, 2009-2016.. 23
Competitive Landscape ... 26
Market Overview.... 26
Company Monitor ... 31
Incentive Programme Fuels GM Regional Expansion .. 31
Demographic Outlook . 33
Table: Uganda's Population By Age Group, 1990-2020 ('000).... 34
Table: Uganda's Population By Age Group, 1990-2020 (% of total) 35
Table: Uganda's Key Population Ratios, 1990-2020 .... 36
Table: Uganda's Rural And Urban Population, 1990-2020 .... 36
BMI Methodology .... 37
How We Generate Our Industry Forecasts .... 37
Sources ... 38

Passenger Car in Uganda

Uganda Vehicle Sales, Units, Mn

• $ 250
• Industry data
• January 2013

Yearly, From 2005 To 2017
By Business Monitor International
Source: Uganda Bureau of Statistics/BMI

• Industries : Passenger Car
• Countries : Uganda

Uganda Vehicle Sales, Units, % Chg Y-o-y

• $ 250
• Industry data
• January 2013

Yearly, From 2006 To 2017
By Business Monitor International
Source: Uganda Bureau of Statistics/BMI

• Industries : Passenger Car
• Countries : Uganda

Uganda Passenger Car Sales, Units

• $ 250
• Industry data
• January 2013

Yearly, From 2005 To 2017
By Business Monitor International
Source: Uganda Bureau of Statistics/BMI

• Industries : Passenger Car
• Countries : Uganda

Uganda Passenger Car Sales, Units, Mn

• $ 250
• Industry data
• January 2013

Yearly, From 2005 To 2017
By Business Monitor International
Source: Uganda Bureau of Statistics/BMI

• Industries : Passenger Car
• Countries : Uganda

Uganda Commercial Vehicle Sales, % Of Total Domestic Vehicle Unit Sales

• $ 250
• Industry data
• January 2013

Yearly, From 2005 To 2017
By Business Monitor International
Source: Uganda Bureau of Statistics/BMI

• Industries : Passenger Car
• Countries : Uganda