Key takeaways from Frost & Sullivan research report on 2025 outlook for African commercial vehicle market

1. 2025 Outlook of African Commercial Vehicle Market
Despite the current slowdown, the African commercial vehicle market is expected to grow at a
robust CAGR of 6.1% until 2025 driven by increasing infrastructure development
MCDA-18
March 2017

2. 2MCDA-18
Contents
Section Slide Number
Executive Summary 3
Research Scope, Aim, Objectives and Methodology 13
African CV Market – Outlook 18
North African CV Market – Outlook 37
Algeria CV Market – Outlook 43
Egypt CV Market – Outlook 48
Morocco CV Market – Outlook 53
Sub-Saharan Africa CV Market - Outlook 58
Ghana CV Market – Outlook 64
Kenya CV Market – Outlook 69
Nigeria CV Market – Outlook 74
South Africa CV Market – Outlook 79
Tanzania CV Market – Outlook 84
Growth Opportunities and Companies to Action 89
Key Conclusions and Future Outlook 92
Appendix 96

3. Return to contents
3MCDA-18
Executive Summary

4. 4MCDA-18
African Commercial Vehicle Market: Key Findings, Africa, 2016
Source: Frost & Sullivan
2
South Africa is the largest contributor to the commercial vehicle market in Africa with 53% share. Until 2025,
Nigeria, Kenya and Morocco, are expected to be the fastest growing markets in Africa and also the only markets
to increase their share in the entire African commercial vehicle market.
3
The LD truck segment is dominated by Japanese OEMs such as Isuzu, Toyota and Mitsubishi making up 67.8% of
the market. The M&HD truck segment on the other hand is fragmented with a more balanced split among key
OEMs. In the Bus segment however the European players are more prominent with nearly 50% market share.
5
Latest technologies such as alternate powertrain and truck telematics penetration is currently negligible. Apart
from a few CNG buses in certain North African markets and adoption of some basic telematics services in South
Africa there is no presence of these technologies anywhere else in the region.
1
The African commercial vehicle market, despite the current slowdown due to low oil and commodity prices, is
expected to grow from 317,533 units in 2016 to 538,774 units in 2025 growing a CAGR of 6.1% largely driven by
increasing infrastructural development and rising urbanization.
4
Asian OEMs, especially from China and India, are expected to further proliferate the market at a rapid pace.
These OEMs will spearhead the supply of value trucks in the region whose share is expected to rise from 43% in
2016 to 55% in 2025.
Key Findings

5. 5MCDA-18
Top Trends
These 8 trends are expected to have a transformative affect on the African commercial vehicle industry
impacting economies, businesses, societies and personal lives
African Commercial Vehicle Market: Top Trends, Africa, 2016
Growing Urban
Centers
Regional
Integration
Future
Infrastructure
New Business
Models
Source: Frost & Sullivan
Improving
Connectivity
Rise of Asian
OEMs
Rise of Value
Trucks
Platformization
Africa will experience
rapid urban expansion
owing to fast paced
development across the
continent
Rapidly increasing
proliferation of mobile
phones and broadband
connection in the region
to be a continuing trend
Platforms seen as a tool
to drive down costs, de-
congest supply chain and
harmonize selections
globally
Several trade corridors
across the region will
bring nations closer and
amalgamate diverse
practices
Key infrastructure
developments in health,
transport, power and
connectivity to play an
important role
Development of newer
business models focused
on affordable products
and services to the
customer
Commercial Vehicle
manufacturers from Asia
to gain prominence by
offering affordable
alternatives
Rapid proliferation of
trucks built to existing
customer demands and
regional conditions at
reasonable prices

6. 6MCDA-18
New Vehicle Dealerships:
• Predominantly privately owned
in partnership with the
concerned OEM(s).
• Also offer spare parts,
accessories and after sales
services
Truck and Bus Business Model/Outlook
New vehicles in Africa are predominantly imported as knocked down kits and assembled in local facilities,
whereas used vehicles are imported as fully built units
Source: Frost & Sullivan
African Commercial Vehicle Market: Business Model, Africa, 2016
New Vehicles:
Vehicles imported
primarily from Europe
and Asia as CKD, SKD
kits or FBUs
Imported Used
Vehicles:
Mainly European,
American and
Japanese brands
Shipped in primarily
from the Middle-East
and Europe
Assembly Plants:
Locally owned units which
partner with OEMs to
assemble vehicles received
as CKD and SKD kits.
Imported as FBUs by
OEMs and sent to
dealerships
Importers/Middlemen:
Help bring in used trucks
from abroad while charging
a commission fee
Used Vehicle
Dealerships:
Independent dealers with
own infrastructure and
individual service/repair
shops
Customers:
Private Fleets,
For-Hire
Fleets, Single
Truck Owner,
Government
and Municipal
Agencies
Selling through local
motor dealers
The entities involved in the sales of vehicles generate continuous revenues through service and sales of spare parts

7. 7MCDA-18
Market Opportunity
Despite the great market potential current industry sentiment in Africa is subdued, due to declining trade as
a result of falling oil and commodity prices, which is expected to recover gradually by 2025
Source: Frost & Sullivan
Countries
Short Term
(2017-2019)
Medium Term
(2020-2022)
Long Term
(2023-2025)
Algeria
Egypt
Ghana
Kenya
Morocco
Nigeria
South Africa
Tanzania
African Commercial Vehicle Market: Market Opportunity, Africa, 2017-2025
High LowModerate

8. 8MCDA-18
Unit Sales and Market Share Forecast
Apart from Nigeria, where currently the CV industry is in turmoil, Kenya, Morocco and Tanzania are
expected to be the fastest growing commercial vehicle markets in Africa until 2025
Source: Frost & Sullivan
The African Commercial Vehicle Market: Unit Sales and Market Share Forecast, Africa, 2016-2025
Algeria
60,258
Units (2016)
88,810
Units (2025)
CAGR
4.4%
Egypt
40,725
Units (2016)
63,268
Units (2025)
CAGR
5.0%
Ghana
4,460
Units (2016)
6,159
Units (2025)
CAGR
3.7%
Kenya
15,389
Units (2016)
28,636
Units (2025)
CAGR
7.1%
Morocco
23,775
Units (2016)
42,661
Units (2025)
CAGR
6.7%
Nigeria
2,248
Units (2016)
22,50
Units (2025)
CAGR
29.2%
South Africa
168,403
Units (2016)
282,845
Units (2025)
CAGR
5.9%
Tanzania
2,275
Units (2016)
3,895
Units (2025)
CAGR
6.2%
19.0%
% Share (2016)
16.5%
% Share (2025)
12.8%
% Share (2016)
11.7%
% Share (2025)
1.4%
% Share (2016)
1.1%
% Share (2025)
4.8%
% Share (2016)
5.3%
% Share (2025)
7.5%
% Share (2016)
7.9%
% Share (2025)
0.7%
% Share (2016)
4.2%
% Share (2025)
53.0%
% Share (2016)
52.5%
% Share (2025)
0.7%
% Share (2016)
0.7%
% Share (2025)

9. 9MCDA-18
Rise of Asian OEMs
Asian OEMs in the recent past have made swift in-roads into the African market and currently contribute
73.1% of the total CV market share in Africa.
Source: Frost & Sullivan
African Commercial Vehicle Market: Rise of Asian OEMs, Africa, 2016
Japanese OEMs: 64.4%
market share
Isuzu, Mitsubishi Fuso,
Hino, Toyota, Nissan and
Mazda
Chinese OEMs: 6.1%
market share
Dongfeng, Shaanxi,
Sinotruck, JAC, Foton,
FAW, King long and JMCIndian OEMs: 2.4% market
share
Tata, Ashok Leyland and Eicher
• The African new truck market was predominantly
dominated by premium brands from North
America and Europe.
• White spaces in the lower price range and
market potential enticed Asian manufacturers in
setting up shop in the region.
• Asian manufacturers have gained traction in recent years due
to optimum truck specs which comply with regional demands.
• These brands are positioned as affordable and value for money
alternatives to their premium counterparts.

10. 10MCDA-18
Key Regional Trends I
Growing emphasis on urban transport along with government incentives to produce vehicles locally is
expected to have the most impact on the commercial vehicle industry in the region
Source: Frost & Sullivan
Alternate Fuel Urban Transport
Tourism
LocalizationLogistical Hub
Alternate fuel vehicles such as
CNG light commercial vehicles and
buses and electric buses, which
are currently at a nascent stage of
development, are expected to gain
traction in future
Growing emphasis by local
governments in the region on
development of public transport
infrastructure including
implementation of BRT systems in
major cities
Increasing incentives to OEMs to
assemble and procure locally,
backed by tightening restrictions on
new and used vehicle imports
A key region that links Europe and the
Middle-East featuring critical
intersecting points and transportation
streams across the region
Tourism is one of the key revenue generators in the region
especially in Egypt and Morocco. Is seen as a sector giving
added impetus to transportation and urban development
African Commercial Vehicle Market: Key Regional Trends, North Africa, 2016
Key
Trends

11. 11MCDA-18
Key Regional Trends II
Top most trends in the Sub-Saharan region: accelerated infrastructural development along with rapid
urbanization and increasing proliferation of Asian OEMs
Source: Frost & Sullivan
Key
Trends
Infrastructure Development Asian OEMs
Connectivity
Fuel StandardsUrbanization
Growth in the region to be
propelled by developments in
road network, trade corridors
and various construction and
energy projects
In addition to strong presence of
Japanese OEMs, there is an
increasing proliferation of Chinese
and Indian OEMs backed by
growing engagement of respective
governments in the region
Countries such as Nigeria and
Ghana have been promoting low
sulphur diesel and implementing
those standards from 2017 impacting
sale of used trucks in the region
The Sub-Saharan region is
experiencing urban migration at a fast
pace with formation of multiple mega-
cities in the continent
Commercial vehicle connectivity in the region will be
pioneered by South Africa through truck telematics
solutions. This is expected to later proliferate to other Sub-
Saharan countries such as Nigeria, Ghana and Kenya
African Commercial Vehicle Market: Key Regional Trends, Sub-Saharan Africa, 2016

12. 12MCDA-18
Current and Future Outlook
Current (2016) Future (2025)
Market • Overall market: 317,533 units; LD trucks: 243,142
units; M&HD: 65,695; Bus: 8,697.
• Currently the market is in a trough due to fall in oil
and commodity prices.
• Overall market: 538,774 units; LD trucks:
392,233 units; M&HD: 129,706; Bus: 16,835.
• Expected to be back to normal on the path of
high growth and increasing opportunities.
Competition • Japanese and Chinese OEMs are more dominant
in the light and medium duty segment.
• European OEMs have more prominence in the
heavy duty segment especially tractor-trailers.
• Asian OEMs, especially Chinese and Indian
OEMs, in a more dominant position across all
segments.
• Europeans OEMs to bring in more value segment
brands into the market.
Product • The region has a sizeable imported used truck
market presence, imported predominantly from
Europe.
• Value truck segment currently at 43%.
• The share of imported used truck market to come
down considerably owing to tighter import
regulations and increasing local assembling.
• Value truck segment expected to grow to 55%..
Technology • Almost negligible penetration of alternate fuel
technologies such as CNG and electricity.
• Only South Africa has any decent adoption of truck
telematics solutions in Africa.
• A sizeable penetration of CNG vehicles expected
in North Africa in the bus and light truck segment.
• South Africa followed by Rest of Africa, especially
Nigeria, Ghana and Kenya, to begin adopting
advanced telematics services.
Challenges • Major macroeconomic hurdles due to slowdown in
the economy.
• Currently infrastructural, financing and labor
challenges plaguing the market.
• Importing fully-built vehicles to face more
stringent regulations.
• Political instability along with weak economic
foundation pose a risk.
Major economies of Africa are expected to recover from the current slump once oil and commodity prices
start climbing up after which it is expected to be back on the path of accelerated growth
African Commercial Vehicle Market: Current and Future Outlook, Africa, 2016 and 2025
Source: Frost & Sullivan

13. Return to contents
13MCDA-18
Research Scope, Aim, Objectives and Methodology

14. 14MCDA-18
Light Duty Trucks (<6T), Medium and Heavy Duty Trucks (>6T), BusesVehicle Type
2017 to 2025Forecast Period
2016 to 2025Study Period
2016Base Year
Africa:
North Africa (Algeria, Egypt and Morocco)
Sub-Saharan Africa (Ghana, Kenya, Nigeria, South Africa and Tanzania)
Geographical Scope
Short Term Medium Term Long Term
2016 2017 2018 2019 2020 2022
Forecast
Period
Base
Year
2021 2023 2024 2025
Timeline
Source: Frost & Sullivan
Research Scope

15. 15MCDA-18
Aim:
The aim of the study is to offer a strategic outlook of the African commercial vehicle market for 2016–2025
focusing on light duty trucks, medium and heavy duty trucks and buses.
Objectives:
• To Understand top trends and its influence in the African commercial vehicle market.
• To provide a strategic overview of the African commercial vehicle market, including key participants and
opportunities.
• To highlight business opportunities and challenges for Western and Asian OEMs and suppliers.
• To provide market size and forecasts for truck and bus market by OEMs and segments.
• To compare and provide strategic analysis for each of the countries part of the study.
• Evaluate the attractiveness of the African commercial vehicle market in the short to medium term and its
impact by 2025.
Source: Frost & Sullivan
Research Aims and Objectives

16. 16MCDA-18
What are the current and future trends affecting the market?
How is the future growth potential and market opportunities in the market?
Who are the key participants, the market leaders and their market share?
How is the market structured and its business model?
How is the economics environment impacting the sales and production of commercial vehicles?
Source: Frost & Sullivan
Key Questions this Study will Answer

17. 17MCDA-18
African Commercial Vehicle Market: Key Industry Participants, Africa, 2016
Research Methodology: Frost & Sullivan’s research services are based on secondary and primary
research data.
Secondary Research: Extraction of information from existing reports and project material within the
Frost & Sullivan database to include data and information gathered form technical papers, specialized
magazines, seminars, and internet research.
Primary Research: More than 10 interviews have been conducted over the phone by senior
consultants/industry analysts with original equipment suppliers, regulation authorities, and distributors.
Primary research has accounted for 80% of the total research.
Source: Frost & Sullivan
Research Methodology
Company
UD
Volvo
Company
Renault
Scania
Shaanxi
Sinotruk
Tata
Toyota
Company
JMC
King Long
MAN
Mercedes-Benz
Mitsubishi
Nissan
Company
Ford
Foton
Hyundai
Isuzu
Iveco
JAC
Company
Ashok Leyland
Chevrolet
Daewoo
DAF
Dongfeng
FAW

18. 18MCDA-18
The value truck segment share in Africa is expected to rise from 43% in 2016 to 55%
in 20252
Truck telematics services in Africa is expected to go beyond just South Africa to other
African regions such as Nigeria, Ghana and Kenya by 2025 .3
The African commercial vehicle market is expected to grow from 317,533 units in
2016 to 538,774 units in 2025 at a CAGR of 6.1%1
Source: Frost & Sullivan
The Last Word—3 Big Predictions

19. 19MCDA-18
One of Frost & Sullivan’s core deliverables
is its Market Engineering studies. They
are based on our proprietary Market
Engineering Methodology. This approach,
developed across the 50 years of
experience assessing global markets,
applies engineering rigor to the often
nebulous art of market forecasting and
interpretation.
A detailed description of the methodology
can be found here.
Source: Frost & Sullivan
Market Engineering Methodology