Starting in June, slowly but surely, Nissan South Africa (SA) will take over the distribution of the Japanese manufacturer’s vehicles in a number of African countries where it currently has independent distributors, says MD Mike Whitfield.
Nissan SA is already responsible for distribution in South Africa, Namibia, Botswana, Lesotho and Swaziland.
Nissan SA will now take over the distributor role in Kenya, Zambia, Zimbabwe, Malawi and Tanzania.
“This will double our country responsibility,” says Whitfield.
“We see significant opportunities in Africa for Nissan. It is one of the few remaining market opportunities in the world.
We must, of course, be careful when we talk about the continent as one market, as each country has its characteristics.”
Several synergies and gains are possible with the addition of the new markets to the Nissan SA fold, says Whitfield, such as optimising logistics pipelines and parts inventory.
The new distributor agreement will also provide opportunities to “Nissan SA’s partners to open dealerships” in the five targeted markets.
However, he emphasises that it is not Nissan SA’s policy to replace all of the brand’s independent distributors in Africa.
Whitfield expects the South African new-vehicle market to remain flat in 2014, owing to increasing pressure on consumer spending power, vehicle price increases and possible further interest rate hikes.
The African market should expand, however, on the back of strong economic growth, even if from a small base.
Grey imports remain a major obstacle to the formal automotive industry in Africa, adds Whitfield.
These imports, some with as little as 200 km on the clock, refer to imported vehicles that were never sold as new in the African countries where they are now on the market.
While the official total industry volume for new and used vehicles in Nigeria is 50 000 units a year, the parallel grey market reaches around 500 000 units a year, notes Whitfield.
“This is true for all over Africa.”
Nissan SA has engaged the Nigerian government, as well as some other African governments, to address this challenge to the formal automotive industry.