The total number of additional vehicles registered in Africa would probably grow to one-million a year over the next five years, predicted Eqstra Fleet Management consulting head Hein du Plessis, indicating significant opportunities in Africa.

Speaking at Eqstra Fleet Management, Unitrans and BDO’s Africa Fleet Study results presentation, he pointed that during 2013, about 656 975 new vehicles were registered on the African continent, with Algeria registering a significant portion – 480 000 vehicles – indicating a massive potential African market, Du Plessis said on Thursday.

To compile the Africa Fleet Study report, the parties involved surveyed 135 companies over 13 African countries, which were chosen because of their economic growth and the interest they received from Eqstra’s clients.

The countries included in the survey were Algeria, Angola, Botswana, Cameroon, Cote d’Ivore, Ghana, Kenya, Mozambique, Namibia, Nigeria, Senegal, Uganda and Zambia with about ten responses received from each country.

Du Plessis explained that, while the sample used for the survey was not representative, the companies surveyed employed about 157 900 people and operated a fleet of 39 000 vehicles and, therefore, the study provided a strong base for future research and information gathering.

The study found that 67% of the companies paid cash for more than 50% of their vehicle fleet, with 42% having bought their entire fleet with cash resources.

Du Plessis said the swing towards outright purchasing of vehicles was not necessarily by choice but could be an indication that there were no sustainable financing alternatives available.

“The banking sector provides finance lease and hire purchase options in most of the countries, and certain manufacturers are also now starting to offer finance options, but the prevalence and availability of contract hire and leasing options remains marginal,” Eqstra Fleet Management MD Murray Price added.

Further, only 21% of the companies surveyed currently used an external logistics provider; however, 62% of those were satisfied with their outsourcing situation, indicating significant potential in future, Du Plessis stated.

From a brand perspective, Japanese automotive manufacturer Toyota dominated the African market with a representation of 28%, closely followed by German multinational automotive company Volkswagen at 27%.

“The rising income of Africans has resulted in the demand for new vehicles. Toyota has a 14% market share in sub-Saharan Africa, a new assembly plant for the Nissan Patrol is planned in Nigeria and Indian exports to Africa have grown by 160%. Namibian vehicle sales increased by 10.4% in 2013 and they have a continual growth forecast of 10.6%,” BDO associate director Abel Myburgh said.

Meanwhile, the survey also found that management enjoyed the greatest access to company-provided vehicles with 27% of company vehicles being “perk vehicles” for people in management positions, whereas only 24% of vehicles were being used for goods shipment and another 20% were provided to sales staff.

Further, 30% of the companies surveyed maintained their vehicles in their own workshops, while 30% used manufacturer-provided maintenance services and another 30% used accredited workshops.

The large number of vehicles that were still maintained through company-owned workshops indicated that there were not enough financially viable maintenance alternatives available, Du Plessis said.

The study also found that companies preferred paying their workers vehicle allowances rather than providing company cars and most did not have systems in place to manage driver behaviour and associated fuel costs.