Factors Impacting Two Wheelers Sales in Africa

In Africa, two-wheelers offer an affordable mode of transportation. Workers as well as travellers, who earlier used to prefer other modes of transportation, are increasingly switching to two-wheelers, to avoid the frantic traffic in the cities across major African countries. Moreover, rising fuel prices is also driving demand for two-wheelers in the continent due to their higher fuel efficiency

Furthermore, as driving license is not mandatory for driving gearless two-wheelers in majority of the African countries, tourists visiting the continent usually opt for two-wheelers for transportation purpose. Motorcycle segment dominated the continent’s two-wheeler market in 2015, owing to various associated advantages such as quicker acceleration, better engine capacity, large fuel tank, larger wheel base and easy maintenance. Booming motorcycle taxis business in African countries is further augmenting demand for motorcycles in the continent. Backed by rapid urbanization, growing population and inadequate means of transportation, the segment is anticipated to maintain its dominance over the next five years as well.

Africa Two Wheeler market tends to increase at a CAGR of 9.1% and reach the market value of USD 9.3 billion by 2024 up from USD 4.6 billion in 2016.South Africa, Nigeria and Tanzania are the largest two-wheeler markets in Africa, followed by Kenya, Algeria, Uganda, Egypt, Morocco, Angola and Ethiopia. As the population of the continent continues to grow at an alarming rate, governments and other stakeholders are coming under pressure to develop and strengthen transport networks. Public transportation system in African countries is still inadequate and poorly developed, and consequently, two-wheelers are becoming a key medium for transportation in urban as well as rural settlements.

Factors Impacting Two Wheelers Market in Africa

Startups Take Africa by Storm-Africa’s vibrant startup scene is gaining momentum, with talk of big investment numbers and entrepreneurs creating deft business solutions spanning the full technological spectrum to meet Africa’s unique challenges. On the other hand, two-wheelers giants such as Ducati, Kawasaki and KTM are among motorbike makers looking to build new growth in this market of 600 million people as orders for larger bikes in industrialized countries slow.

Economic Forces & Increased Interest in Big Bikes- Growing per capita income, increasing employment opportunities, developing infrastructure and vast reserves of natural resources are driving the country’s economic growth. According to the Association of Motorcycle Importers and Distributors, the country registers huge demand for premium motorcycle with an engine capacity of more than 500cc, and the same trend is expected to continue over the next five years as well. As these high-end motorcycles are comparatively costlier than other motorcycles with low engine capacities, the two-wheeler market of South Africa is expected to grow at a healthy pace in value terms over the next five years.

Poor Infrastructure-The main infrastructure constraints are electricity and transport. Africa needs to spend 4.5 percent of GDP to significantly improve its infrastructure but a group of countries comprising Cameroon, Kenya, Nigeria, Senegal, and Zimbabwe were only spending 1.3 percent of GDP during 2010–2015. Corruption also features as a heavy cost burden. In all, invisible costs in Africa accounted for 13 percent of sales compared to less than 8 percent in the next highest region (South Asia) and below 3 percent in East Asia.

This is an edited extract from “Africa Two Wheeler Market Outlook 2025: Growth & Opportunity Analysis” a study undertaken by Goldstein Research. The study was conducted using an objective combination of primary and secondary information including inputs from key participants in the industry. A systematic approach in order to estimate and project the market sizing has been followed keeping in mind all the on-going and upcoming trends of the market. For more, visit: http://bit.ly/2vuH9ai

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Goldstein Market Intelligence helping businesses to be successful at strategy and take informed decisions to grow the business in future.

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