90% of the vehicles imported into most African counties are used vehicles imported from Europe, Asia, and North America. This is because most people are not able to afford brand new vehicles that usually retail from about $30,000. The main reason for this is the fact that the majority of people in these developing markets have lower incomes than people in developed nations. The vehicle financing market is not as well developed in many countries on the continent and there is a general lack of affordable vehicle financing.
These used cars could be 8 years old or older than 8 years depending on the import rules of the country. The popular cars in this range include the Honda Fit, Toyota Yaris, and Mazda CX 5. These vehicles will retail locally from about $8,000 to about $20,000 depending on the age, condition, and mileage, allowing more people to afford to buy a car.
These financial barriers mean that very few people can afford to buy a car. On the other hand, the public transport systems in many of these countries are not as efficient as they should be to meet the needs of the population. African countries still have very low levels of motorization compared to countries in the developed world. Only a handful of countries have motorization rates above 100 vehicles per 1000 people. The majority of countries have rates below 50 passenger vehicles per 1000 people. To put this into perspective, South Korea and Germany have rates above 500 passenger vehicles per 1000 people. The US has an even higher rate that’s closer to 800 vehicles per 1000 people, according to a study by Siemens Stiftung. All of this means that many people on the continent still don’t have access to a reliable private or public means of transportation.
The accelerated roll-out of mass transit systems along with the associated infrastructure and well as the promotion of micromobility will go a long way in addressing these challenges. However, private vehicles also have a role to play in meeting the daily needs of a community, which is why access to the best fit affordable cars could have a transformational effect on the local economies. People could save on time spent queuing and waiting for transport. Perishable goods would also get to markets in a timely manner, helping reduce the widespread post-harvest losses.
I am always looking into developments in the Chinese EV market because just as the Chinese manufacturers helped reduce the cost of solar panels over the past decade, Chinese EV companies look most likely to do the same in the EV market. Most people would really be ok with a decent practical car to get you from A to B quite comfortably and won’t mind missing out on some “bells and whistles.” There are now quite a few affordable city EVs in China that retail for less than $10,000.
The real star of the show that helped create this new and exciting market for vehicles in this category is the Wuling Hongguang Mini EV. Since its launch in the middle of 2020, it has gone on to sell more than 700,000 units in China. The fact that it has sold nearly three-quarters of a million units in about two years shows how fast the market is growing. It could also point to the fact that EVs are now starting to go mainstream. 700,000 units sold in 2 years in one market shows how far we have come when compared with sales of one of the first real mass production EVs, the Nissan Leaf, which took 10 years to reach 500,000 units sold.
Despite all this success, the Wuling Hongguang Mini EV still has quite a few critics around the world. Whenever a new article on the Wuling Hongguang Mini EV is posted, the comments section usually has quite a few people saying that the car looks a bit too small and may not be safe. Some people even say it’s not even a real car. But this little EV is transforming the mobility space in China and is creating a new and exciting market. It is giving an opportunity for some people who may have not have the chance to buy a traditional car as these were beyond their reach. A lot of the people who buy the Wuling Hongguang Mini EV are first time buyers in second, third, fourth, and fifth tier cities in China.
Vehicles in this segment could also have a similar effect in Africa. But more questions have been coming from some sections asking whether this car could really stand some of the interesting roads we have in some of the urban centers in Africa? Would its low profile handle some of the very rough and extensively potholed roads? Is it even big enough for local use cases?
After reading about this new innovation from GM, Wuling, and SAIC over the past couple of years and watching a lot of videos on this blockbuster Mini EV, I finally managed to see one in real life. First impressions: It is not as small as I thought. While it is compact and narrow, it actually has a similar height to some “normal” cars such as the Toyota Aqua. The front seats are much roomier than I expected. There is some decent space for the driver and front passenger. The rear seating area is not so generous, and that is putting it politely. However, it is quite useful with the back seats folded. The boot space of the Wuling Hongguang Mini EV is 741 liters when the rear seats are folded down. One can easily fit four decent-sized suitcases as shown below:
I can see quite a few great use cases for this type of car locally. The Wuling Hongguang Mini EV could be a great asset in last mile delivery in the same way the Citroen Ami cargo is being positioned. High school kids, college students, and early stage career professionals could be key target segments. The Unbelievable Company has set up operations in Zimbabwe and is ready to take orders for the Wuling Mini EV. Looking forward to seeing how the market evolves.
Images courtesy of The Unbelievable Company
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