INSIGHT: Luxury cars now flooding African cities

Part of Dar es Salaam City. A proliferation of new vehicles contributes to traffic congestion in the city   PHOTO | FILE 

In Summary

• Wealthy Africans love big, high, four-wheel drive vehicles not only are they better adapted to roads, but  also become something of a status symbol

Abidjan. Porsches, Range Rovers and even Maseratis... luxury cars are no strange sight weaving through the old bangers that rumble along Abidjan’s chaotic streets, another indication of the emergence of a wealthy class in Africa.

Each of the vehicles costs at least tens of thousands of euros, representing decades of work for an Ivorian earning the minimum wage, even after it was recently hiked 60 per cent to 60,000 CFA francs (around 90 euros, $125) a month.

Yet, in wealthy Abidjan neighbourhoods the streets are jammed with more luxury autos than in rich quarters of European capitals. It’s the same story in Johannesburg, Lagos or even Libreville. In the Gabonese capital it is common to see SUV after SUV snaking along the oceanside boulevard. Wealthy Africans love the big, high, four-wheel drive vehicles. Not only are they better adapted to the roads, regularly in a poor condition, they have also become something of a status symbol.

In Gabon, 70 per cent of the 6,000 new vehicles sold each year are big 4x4s, mostly Japanese models, according to the Gabonese Federation of Car Importers. “Here, it’s a 4x4 or nothing,” said one car importer, who declined to give his name.

For the Gabonese, the SUV has become “the symbol of success, much more than a house”. In Ivory Coast, luxury cars make up only 3 per cent of the 8,000 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 the high taxes slapped on new cars have given the second-hand car market a boost. A significant proportion of luxury cars enter the country this way from Europe, the United States and even the Middle East. It isn’t just SUVs.

Despite the potholes that riddle Abidjan’s streets, there are importers offering low-slung sports cars like Lamborghinis and Ferraris. A former rebel military leader turned security official, Issiaka Ouattara, known as “Wattao”, was recently seen on national television driving a Maserati.

This brash display of luxury cars is an indication of the growing wealth in Africa despite increasing numbers living in extreme poverty. The African Development Bank (AfDB) 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 per cent 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 last year, which the company described as a “promising” figure, the automaker is committed to expanding further across the continent. Local partners are being sought for dealerships in Cameroon, the Democratic Republic of Congo (DRC), Ethiopia, Gabon, Ivory Coast, Namibia, Senegal, Tanzania and Zambia.

Mercedes also views the potential of the African market as “enormous”, a spokeswoman said. The German carmaker has an assembly line in South Africa, where it sells 20,000 vehicles per year. BMW said it also intended to keep expanding across Africa, where it saw 15 per cent sales growth in 2012 to 34,000 vehicles. As for Audi, the company 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.

A lack of parts and diagnostic equipment has led to these high-performance vehicles being kept off the road for months in Abidjan, according to an expert on the local car market.  “If Porsche comes to Ivory Coast, customers will be overjoyed to be able to repair their cars in a company garage,” said another expert on the African market. “But they won’t necessarily buy there,” he added. “Well-heeled clients are no different than others” and will likely plump for a second-hand vehicle in good condition that is much less expensive, he said. (AFP)