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Youths between 18 and 25 years in South Africa would like to own a car. Of course, every youth in the world would like to own a car! Even in the western world, a car is as much a status symbol as it is functional. However, a number of barriers stand in the way to car ownership.
In Africa, owning a car elevates one’s status in the society and no doubt, one of the reasons why every student in Campus would love to own a car is to carve themselves a niche in the club, in the high echelons of the campus society. However, many barriers lie in the way for any student aspiring to own an auto.
In South Africa, research shows that at the crucial age of between 18 and 25 (student-age), only one out of every three students has a car. However, it also shows that all of the students would love to own a car and therefore this presents a potential market for car-makers who can produce a marketable car, at an affordable student price.
Why the focus on South Africa? You may ask. South Africa is the most developed nation in Africa. It is perhaps even far ahead than some Eastern European and Asian counterparts. It is densely populated. It is a land of hope and dreams, a land where everyone has a chance to be someone, a land where there is something for everyone out there, as long as one is willing to go and work for it.
South Africa sets the standards first and then the rest of Africa follows. That means that the first manufacturer who will provide a very affordable locally assembled or manufactured car will carve themselves a big piece of the pie in Africa. The car-maker would have to understand the demographics, then go ahead and find a dealership through which to sell his cars. The dealership would then have to organize fueling, financing and insurance for the student buyers.
The impending barriers
Financing, Insurance and Fueling
It is not as much as the price of buying the car as the insurance and other costs involved in owning a car. Insurance premiums are quite high and again, they are a recurring cost that must be met every month or every year. And then there is the touchy issue of financing. It is hard to find a financing package that would exactly fit the needs and budget of a student.
Students have low or no credit at all and therefore finding a financier is hard, nigh impossible. However, it can happen, with a car-maker who does not fear trending where others have not tread. However, research indicates that almost all the youths consulted their parents before buying a car.
In Africa, a car is more than a car. It is a very personal item and therefore anywhere that it treads, it must make a personal statement. Pimping, as the art of car accessorizing is known in Africa, is very expensive and no student wants a plain ride! Therefore, as the students consider the cost of the car, the cost of “souping” up their rides comes in close too. Thankfully, many models of Japanese, American and European cars are coming already souped up, therefore attracting no extra cost!
The most popular brands
There is a little of Japan, America, South Korea and even Europe. Toyota Yaris, Ford Focus, Hyundai and Opel seem very popular especially because they come fully or partially accessorized. In addition, for most students, Engen, BP and Shell seem to be the most popular filling stations, just as they are in the rest of Africa.
Conclusion: It is a ripe ready market, but no car-maker has as yet figured of a way to reap the full benefits that this market offers. Needless to say, the first one to dig in will serve the rest of Africa.