Japanese automakers looking to Africa as last promising market

October 8, 2018

NAGOYA (Kyodo) -- Japanese automakers are increasingly looking to Africa as the last untapped growth market with its growing population and expanding middle class.

Major carmakers such as Toyota Motor Corp. and Nissan Motor Co. are expanding sales networks and product lineups in the African market where U.S. research company Frost & Sullivan estimates demand to nearly double to 3 million vehicles by 2025 from 1.55 million in 2015.

Auto sales in Africa currently center on used cars but a Japanese automaker official said demand will likely shift sooner or later to new vehicles as personal incomes continue to rise.

Toyota said in June it is considering transferring its sales and marketing operations in Africa to Toyota Tsusho Corp. from next January to capitalize on the trading house affiliate's operations in 53 of Africa's 54 countries and regions.

'Toyota Tsusho has more than 10,000 Toyota Tsusho Group employees on site in Africa and has great strengths when it comes to doing business in Africa,' Toyota said in a release.

In one of the most recent deals to bolster its African business, Toyota Tsusho took full control in 2016 of CFAO SA, a major French trading house dealing in automobiles and medicines in African countries.

Nissan said it aims to increase its share of the new car market in South Africa to 15 percent by 2022 from 10 percent through a wider range of models including more passenger vehicles to offer the growing middle class.

As part of that strategy, Nissan introduced the Micra compact in June in the largest market on the continent to add to its pickup truck lineup.

Suzuki Motor Corp. is in talks with a local company to manufacture passenger cars in Algeria, according to sources close to the matter. Suzuki is also considering teaming up with Toyota in logistics and aftermarket services in Africa, as the two companies said last year they would seek a partnership in some operations.