Growing Plugless Hybrid EV Market Share In Japan Has Direct Implications On The African Vehicle Market

The Japanese auto industry dictates the African vehicle market, especially in east and southern Africa, where 90% of the vehicles imported into this region are vehicles from Japan. Most of these vehicles are imported as used vehicles. Japanese brands rule in Africa and Toyota is King. Nissan and Mazda vehicles are also quite popular in Africa. Hundreds of thousands of used Japanese vehicles are imported into Africa each year. That’s because only a handful countries in Africa have outlawed the importation of used vehicles. These are Egypt, Morocco, South Africa, and Sudan. The rest have age restrictions on the maximum age of a vehicle that can be imported. These age caps range from 3 years to 10 years. Some countries apply a penalty fee for vehicles that are over 10 years old. A few others have no age cap at all. Used vehicles are then able to land at prices that are more affordable for the large majority of the low to middle income consumers, resulting in the growth of used vehicles imports in some markets at rates of over 10 % per year.

I wrote an article about 3 years focusing on how the slow uptake of battery-electric vehicles (BEVs) in Japan will hamper the adoption of BEVs in a lot of countries in Africa. At the time, there were very few BEVs in Japan, most of them being the first gen Nissan Leafs, which aren’t so good for Africa due to the lack of active thermal battery management. This means African markets, especially those that need right-hand drive vehicles, would be starved of affordable used EVs to buy. The lower disposable incomes and lack of widespread vehicle financing solutions mean that for most families on the continent, used vehicles are the only option, and affordable used EVs would really help drive adoption on the continent.

Japanese OEMs have been focusing more on plugless hybrid electric vehicles (HEVs) and these are now starting to find their way to the traditional African markets in large quantities, showing that the Japanese auto sector continues to dictate the market in a lot of countries in east and southern Africa.

I carried out a survey recently where I went around asking most of my friends and colleagues in Zimbabwe and similar markets in the region which cars they had bought recently. I found that most of them recently acquired some of these HEVs from Japan. Some of the popular models that are now common on the streets are the Honda Fit HEV and the Toyota Aqua HEV. In Kenya, one of the most popular models is the Mitsubishi Outlander plug-in (PHEV) hybrid, and these are now starting to pop up everywhere you go.  There is now even a thriving industry for mechanics who refurbish battery packs from these 5- to 10-year-old HEVs and PHEVs. That’s because some of the models will now be 7 or more years old when they first arrive in these African markets and will some have issues related to degradation of some cells, hence these technicians offer services related to battery health diagnosis as well as cell or pack replacements.

This used HEV supply train for the African markets is set to boom in the near future given the increasing market share of HEVs in Japan. A recent Tweet shared by Tavi shows that HEV market share has been growing steadily in Japan and now sits at around 55%. In a market that sells around 4 million vehicles per year, that’s a lot of right-hand drive HEVs, and some will find their way to African markets in the near future. Already, in 2020, the market share for these HEVs was already well above 30%, and since most consumers in the used vehicle market buy vehicles that are around 5 years old, the flood of HEVs to Africa will be with us very soon. This 5-year lag seems to be consistent with used vehicle imports from the United Kingdom, and Mitsubishi Outlander PHEVs from the UK that are 5 years old or so are also starting to find their way into some African markets, although the bulk of the vehicle supply in the used car market is from Japan.

The BEV market share in Japan as shown in that Tweet by Tavi only momentarily spiked above 2% around December of last year and is now hovering just above 1.5%.  So, to get more BEVs into these African markets, we really need BEV sales to start growing big time in Japan. These is some hope starting to come through as Tesla is now offering more models in Japan. The second generation Nissan Leafs (40kWh versions) are also getting to that 5-year-old range where the pricing becomes more palatable for used vehicle dealers to import and sell in the various markets on the continent. BYD recently launched sales in Japan starting with the ATTO 3. The Seal and the Dolphin will follow. The ATTO 3 sold about 150 units in its first  full month, which is encouraging, and I hope sales start to pick up. The Dolphin, which is a compact hatchback, will hopefully do well there as it is in a similar vehicle segment with the popular Honda FIT HEVs and Toyota Vitz.

For left-hand drive markets in West Africa and other places, they have an option — China! They are now starting into import used BEVs as well as low mileage and brand new BEVs independently from China. And with the rise of very affordable BEVs in China ranging from the Mini EVs to the City EVs to compact SUVs, the supply of affordable BEVs to these African markets will rise faster than HEVs. Very few of these small BEVs in China have right-hand drive options. Perhaps as these Chinese OEMs ramp up production and accelerate export plans, they could include more models in right-hand drive. The Wuling Air, which is assembled in Indonesia, is already coming in right-hand drive and will go to markets like India.

Thailand is another important market, and already the Hozon Neta is on sale there. Hozon is also opening a factory in Thailand. The BYD Dolphin is also going to Thailand and with BYD building a factory there with an annual capacity of 150,000, there will be a decent supply of right-hand drive models to import from there in the near future. Used vehicles from Thailand are also common in east and southern Africa, although Japan remains the main source market, therefore, it would be great if BEV sales start picking up there.

Images courtesy of Tavi