Stellantis creates used-car business in sub-Saharan Africa
18 September 2022
Automotive giant Stellantis is launching business activities in sub-Saharan Africa (SSA) aimed specifically at unlocking the potential of the African used-car market.
Based in Ivory Coast, Auto24 is a direct-to-consumer, used-car company, created through Stellantis taking a stake in Africar Group, Africa’s leading online automotive marketplace. Operating across more than 40 countries in SSA, over the last five years Africar Group has enabled over 25 million buyers and sellers to trade used cars through its online channels.
Central to Stellantis’ plans to branch out into new automotive pastures is the projection that the African population is expected to reach 1.7 billion by 2030, and currently has a car parc of 50 million units.
The automotive market in SSA is heavily reliant on used-car sales, a key driver in Stellantis’ decision to set up Auto24. Overall, the automotive industry in SSA is relatively small, with only 422,611 new vehicles sold in 2018. Used-car sales in the region amounted to 449,324 units in 2018.
‘In Sub-Saharan Africa, Stellantis offers the largest network coverage of the automotive industry with close to 124 points of sales and maintenance,’ stated said Samir Cherfan, Stellantis Middle East & Africa chief operating officer.
‘Given the colonial ties between France and Africa, it comes as no surprise that French carmakers are significant players across the North African markets of Algeria, Morocco, and Tunisia, but also have a strong presence in SSA, in countries such as the Ivory Coast – also once a French colony, where Stellantis has announced the launch of activities with Africar Group,’ outlined Autovista24 senior data journalist Neil King.
‘Next logical step’
Other factors influencing Stellantis’ decision to expand operations in this part of Africa could include maximising used-car markets in the region as incomes rise and consumers become financially able to consider buying their first, typically used, car.
‘Coupled with this, the region could offer increased opportunities to export used cars south from North Africa, as opposed to north and into the struggling Spanish market for example. This is an additional sales channel for carmakers to tap into, especially French players such as Stellantis, that are already firmly established,’ King added.
‘This investment in Africar Group to create Auto24 re-enforces our strategy to grow our used-vehicle business activity globally in a bold, pragmatic and agile way,’ commented Xavier Duchemin, senior vice president of the pre-owned vehicles business unit at Stellantis.’
‘It will follow the same blueprint as per the other Stellantis investments in the used-vehicle ecosystem. The founders will accelerate the development of their activities while capitalising on Stellantis yet maintaining the inventiveness, energy and agility that characterises startup companies.’
As well as the establishment of Auto24, there have been industry-wide developments aimed at strengthening and developing the African automotive landscape, and linking up global carmakers and organisations with the continent.
Earlier this year, a memorandum of understanding (MoU) was signed by 12 automotive associations in Africa and Europe to develop the former’s car industry. Signatories included the African Association of Automotive Manufacturers (AAAM), the European Automobile Manufacturers’ Association (ACEA), the European Association of Automotive Suppliers (CLEPA), the German Association of the Automotive Industry (VDA), and the German – African Business Association.
The strategic and commercial agreement is intended to focus on several elements key to sustained growth of the African automotive sphere. These include developing strong local supply and value chains in the car-manufacturing process as well as instilling the use of sustainable energy resources propulsion systems, as well as digital mobility solutions.