It appears as though Chinese automakers are focusing in on a new market. With European and North American markets currently unavailable due to strict regulations and fierce competition, Chinese automakers are expanding into Africa.
Until recently, Africa’s car market has been primarily composed of used cars shipped from Europe. But now, many Chinese automakers, such as Great Wall, Chery and Geely Group, have begun exporting their cars to Africa, undercutting the used-car market by thousands of dollars. Faced with the choice of buying a more expensive used car or a cheaper new car, many Africans are buying Chinese vehicles.
The transition to the African market was an easy one thanks to lack of competition and lax emissions and safety standards. “The performance-price ratio of our products is high so African people like our brand,” says Zheng Guoqing, who handles Africa sales for Great Wall. “The emissions standard is not particularly high there. The requirement for safety is also not high.”
According to The Wall Street Journal, several African countries have adopted laws preventing the import of cars over five years old in an effort to eliminate cheaper used cars and spur on new car sales. In Senegal, one such country that has enacted this law, Chinese car imports have risen from $434,000 to $7.9 million in just four years. In contrast, many European car exporters have seen a two thirds decline in the African market.
It appears as though the African shift to Chinese cars will only continue to grow as there are a very limited number of new-car alternatives. Elir Odio, a new car shopper in Africa, commented of the situation by saying, “European companies need to come to us, or we’re all going to buy Chinese.”
