Reports from Tokyo reveal that Chinese automaker BYD has set its sights on the Japanese electric vehicle (EV) market with plans to sell a minimum of 30,000 EVs annually. The company aims to achieve this through an extensive network of approximately one hundred dealers across the country.
This move by BYD could have significant implications for several countries in East and Southern Africa, particularly those heavily reliant on Japanese imports for their vehicle needs. In these regions, up to 90% of yearly vehicle imports, excluding South Africa, are sourced from Japan, primarily in the form of used vehicles. The majority of these imports are over 8 years old, reflecting the economic constraints faced by consumers who contend with lower salaries and limited access to advanced vehicle financing options.
In the absence of widespread affordability for brand-new vehicles, corporate entities and fleet operators, such as telecommunication and mining companies, dominate the market for new vehicle purchases. Additionally, senior management often receives company cars as part of employee retention incentives.
The preference for used vehicles is evident in countries like Zimbabwe, where 95% of the 76,000 light-duty vehicles registered last year were Japanese imports. Similarly, Kenya saw 90% of its 80,000 registered light-duty vehicles coming from Japan. The well-established supply chain, active for approximately 25 years, has solidified the relationship between the Japanese vehicle market and East and Southern African countries.
This enduring relationship influences vehicle trends in these African markets, typically with a lag time of 5 to 8 years. The recent focus in Japan on plugless hybrids has already begun shaping the African market, with a notable increase in the share of plugless hybrids in East and Southern Africa. The effects are not limited to hybrids, as Nissan LEAFs, introduced to the Japanese market about 7 to 8 years ago, are now making a significant impact in these African regions.
Despite the success of the LEAF, experts note that the first-generation model’s lack of active thermal management may present challenges in certain African climates. However, BYD’s ambitious plans in the Japanese EV market could potentially bring about a new wave of technological and market shifts in the coming years. As the automotive landscape evolves, East and Southern Africa may find themselves at the forefront of changes spurred by developments in distant markets. Read More