• Saturday, March 02, 2024
businessday logo

BusinessDay

Africa, (Nigeria) new El Dorado for luxury cars

businessday-icon

Porsches, Range Rovers and even Maseratis… luxury cars are no strange sight weaving through the old bangers that rumble along Nigeria’s political capital of Abuja, the nation’s economic nerve centre of Lagos and the oil rich Niger Delta region chaotic streets, another indication of the continuous and rising emergence of a wealthy class in Africa.

Each of the vehicles costs at least tens of thousands of euros, representing decades of work for and the super rich Nigerian earning the minimum wage.

Yet in wealthy Lagos, Abuja, Kano, and the oil rich zones,  the streets are jammed with more luxury automotives than in rich quarters of European capitals. It’s the same story in Johannesburg, Abidjan, or even Libreville.

In every nook and cranny of the country especially around the coastal cities of Lagos, Port Harcourt  and Warri regions, it is common to see Sport Utility Vehicle after Sport Utility Vehicle snaking along the Oceanside boulevard.

Wealthy Africans love the big, high, four-wheel drive vehicles. Not only are they better adapted to the roads and ideal to navigate through potholes and pool of waters during heavy down pour regularly in a poor condition, they have also become something of a status symbol.

In Nigeria, a good number of both new and old vehicles sold each year are big 4x4s, mostly Japanese and German  models  in their large numbers, according to the statistics of of car imports.

“Here, its a 4×4 or nothing,” said one car importer who declined to give his name in print. For this Nigerian, the SUV has become “the symbol of success, much more than a house”.

In Nigeria, luxury cars make up only a high percent of the new cars sold each year, said one industry expert who asked to remain anonymous.”However certain customers are looking for the top of the line “bling-bling” cars there are people with money like that in the market,” he added.

But at the moment, the absence of high taxes  on new cars have not given the second-hand car market a boost as a significant proportion of luxury cars enter the country this way from Europe, the United States and even the Middle East. And it isn’t just SUVs.

Despite the pot holes that riddle Nigerian roads and streets, there are still some privileged few in the society cruising low-slung sports cars like Lamborghinis and Ferraris. In most cases, one only sees them around the highly exclusive preserve of the wealthy and not around the ghetto or the suburbs.

This brash display of luxury cars is an indication of the growing wealth in Africa in generaland Nigeria among other countries in the continent specifically despite increasing numbers living in extreme poverty. The African Development Bank put the size of the African middle class at 300 million in 2011.

Ventures financial magazine recently put the number of African billionaires at 55 more than triple the previous count. That figure is likely an underestimate, the Nigerian magazine said, as many are not comfortable disclosing the true extent of their wealth.

Expansion across the continent.  Luxury automakers are not letting this bonanza pass them by. Porsche boasts a brand new showroom in Victoria Island, one of Lagos’ most chic neighbourhoods. The German carmaker’s sales have jumped by nearly 40 percent the past two years in South Africa, where it has been present for decades.

It has recently set up shop in Angola and Ghana as well as Nigeria, according to Christer Ekberg, Porsche’s managing director for the Middle East and Africa.

With 2,000 Porsche cars sold in sub-Saharan Africa in the first three quarters of this year, which the company described as a “promising” figure, the automaker is committed to expanding further across the continent.

Mercedes also views the potential of the African market as “enormous”, a spokeswoman said.The German carmaker has an assembly line in South Africa with 20,000 vehicles sales per year.

BMW said it also intends to keep expanding across Africa, where it saw 15 percent sales growth in 2012 to 34,000 vehicles. Audi expects further growth in certain parts of Africa, where its sales have doubled in three years to 22,000 vehicles.

The carmakers are also being pulled in by the need to service their vehicles that have already found their way into African countries. Lack of parts and diagnostic equipment has led to these high-performance vehicles being kept off the road for months in some of these countries, according to an expert on the local car market.

By:  Mike Ochonma