Wednesday, October 30, 2013

Why car companies are running to Africa

Porsche showroom in Lagos
Wonder why the car companies are rushing to Africa?   Africa has seen remarkable economic growth in the last few years.  That's partly the reason.  But added to that is the fact that more and more Europeans are opting for bicycles rather than cars.  Sounds funny?  Not at all.  Check out the statistics below.
Bicycle sales outpaced new-car sales last year in every one of those countries, except Belgium and Luxembourg, reports NPR. Car sales hit a 20 year low last year in Europe.
New data from the European Automobile Manufacturers Association, new vehicle registrations continued to slip with a decline of 6.3 percent in June 
According to BMW CEO Nobert Reithofer in an interview with a German publication, "Little will change."

New data from the European Automobile Manufacturers Association, new vehicle registrations continued to slip with a decline of 6.3 percent in June, bringing total sales for the first six months of the year to just 6.44 million, a 6.7 percent drop.
As Africa's rising middle class indulge itself, it is needful for governments across the continent to ensure that we don't get carried away by the excitement of the new found luxury.  Compel these companies to grow local manufacturing capacities and in so doing create needed jobs and save scarce foreign exchange.
We don't just need the Indian and Lebanese distributors who market for these car companies, we need the companies to be physically present on the continent to enable the domestication of technical knowhow.
The huge gap between Africa's economic growth and high unemployment and poverty needs be bridged.  Local manufacturing capacities will ensure technology transfer.
Also, we must not compromise economics and environment.  The two are mutually reinforcing and not exclusive.


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