In Africa, small and medium-scale car dealers comprise almost 82% of the car dealership market, and most of these merchants sell second-hand automobiles at high prices due to inadequate financing. In emerging markets like Vietnam, India, Brazil, Indonesia, Malaysia, and a substantial fraction of Latin America the average of institutional credit in automotive transactions is about 65% to 70%, but it is less than 2% across most parts of sub-Saharan Africa.
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Although mobility fintech startups are springing up across Africa to solve the vehicle financing challenges, most of them target the established car dealers who make up 18% of the car dealership market or consumers. Nevertheless, experts are pointing to the sporadic rise of mobility fintech and the attending funding as positive signs for future prosperity in the industry. Therefore, this article, drawing from a series of studies, itemizes and discusses the predictions and trends we are expected to see in the African mobility industry in 2023 and beyond.
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Increased adoption of electric vehicles
As governments in Africa look to reduce their dependence on fossil fuels and improve air quality, the adoption of electric vehicles is likely to increase in the coming years. Two years after the Stallion Group launched the first-ever electric car assembled in Nigeria in 2020, less than 200 units have been sold. Although this might seem poor, for many Nigerians, especially among the youth, electric cars seem trendy and might be adopted shortly.
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Growth of ride-hailing services
The popularity of ride-hailing services such as Uber and Bolt is expected to continue growing in Africa, as more people turn to these platforms for convenient and affordable transportation. Also, indigenous raid-hailing services like Treepz, RideOn, Lagos Ride, Rida Nigeria, etc., indicate the growth of ride-hailing services.
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Expansion of public transportation
Governments are willing to invest more in public transportation infrastructure in the coming years, to improve mobility for their citizens and reduce traffic congestion. For example, the governor of Lagos State, Babajide Sanwo-Olu launched the Lagos Ride, where commuters can pay using a specialized card meant for the purpose.
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The emergence of new technologies
The African mobility industry is likely to see the emergence of new technologies such as autonomous vehicles, drones, and connected cars, which will have a major impact on the way people travel.
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Increased focus on safety
As the number of vehicles on African roads increases, there will be a growing focus on road safety and the need to reduce accidents and fatalities.
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Greater investment in infrastructure
The need for better roads, bridges, and other transportation infrastructure is likely to lead to greater investment in these areas in the coming years. As Africa continues to partner with China, social infrastructure is likely to increase to over 40% by 2030.
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Growing demand for cargo transportation
As the African economy continues to grow, there will be a growing demand for cargo transportation services, which will require the deployment of new technologies and the expansion of existing infrastructure.
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Emphasis on sustainable transportation
Governments, cities, and private companies will place more emphasis on sustainable transportation options, such as bike-sharing, carpooling, and public transportation.
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Increased use of data and analytics
The African mobility industry will see a growing use of data and analytics to optimize transportation systems, improve traffic flow, and reduce congestion.
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Rising interest in intermodal transportation
The African mobility industry will see a rising interest in intermodal transportation, which allows for the seamless transfer of passengers and cargo between different modes of transportation such as trains, buses, and ferries.
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Concluding Remarks
The African mobility industry is facing a period of rapid change and growth, driven by advances in technology and increasing demand for transportation services. Electric vehicles, ride-hailing services, and new technologies such as autonomous vehicles and drones are expected to play a major role in shaping the industry in the coming years. Governments, cities, and private companies will be investing in public transportation infrastructure and placing more emphasis on sustainable transportation options. There will also be a growing use of data and analytics to optimize transportation systems, improve traffic flow and reduce congestion. Overall, the industry is expected to face challenges and opportunities, but with an emphasis on safety, infrastructure, technology and sustainable transportation, the future of the African mobility industry looks promising.
Featured Image Source: Financial Fortune Media
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