Cameroon Autos Report Q2 2012
Business Monitor International, February 2012, Pages: 32
Business Monitor International's Cameroon Autos Report provides industry professionals and strategists, corporate analysts, auto associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Cameroon's automotive industry.
According to statistics from Cameroon's Ministry of Public Works, only 10% of the country's 50,000km of roads are tarred. Coupled with the lower spending power relative to regional peers such as Ghana and Nigeria, this has restricted the new vehicle market. Consumers are less likely to spend on new vehicles that will be abused by a harsh environment. As a result, the used car market is 10 times the size of its new car counterpart.
Car ownership is still low by regional standards, and is only just expected to pass 20 cars per 1,000 people during their five-year forecast period, to 2016, which suggests there is not the same level of middle class development as in some of the bigger Sub-Saharan African markets. According to official statistics, several economic episodes have reduced demand for new cars in favour of cheaper second-hand alternatives. These include the economic crisis of the 1980s, the franc's devaluation and the reduction in civil servant salaries in the 1990s.
That said, BMI's forecast for an acceleration of GDP growth, from 3.2% in 2010 to 3.7% in 2011, 4.3% in 2012 and 5.0% in 3013 is positive for consumption-led industries such as autos. BMI expect annual real GDP growth to average 4.2% between 2011 and 2016.
A marked uptick in infrastructure spending (with the government increasingly turning to China in its development efforts), and construction projects in particular, shows potential not just for commercial vehicle demand, which often correlates with infrastructure investment, but also for the improvement of the country's roads to accommodate increased vehicle use. Road transport accounts for around 70% of the country's transport network but is severely constrained by the poor state of the roads.
There is potential in terms of infrastructure improvement. The government announced that it had budgeted XAF248.963bn for the rehabilitation and maintenance of road infrastructure in 2010. More than 60% of the investment was to be used for maintenance on 10,569km of main roads and 5,295km of rural roads, as well as the rehabilitation of 120km of priority roads and 130km of rural roads and the tarring of 180km of new high-traffic roads and 120km of moderate roads.
However, official figures indicate that 40% of Cameroonians live below the poverty line. Political risk and a lack of adequate infrastructure are still pressing concerns, and while there have been some efforts to address these problems, a lot more needs to be done if the country is not going to be considered a 'frontier' market for many years to come.
Until such time as the road network and economic conditions are improved to a sufficient standard that a more dynamic new car market can be supported, the second-hand segment will continue to dominate. With this in mind, the government introduced a new procedure in January 2011 to make it easier to import used cars. The necessary documents are now stored and transferred electronically to reduce clearance time for vehicles at the port of Douala and improve contact between importers and dealers. It is hoped this will improve access to vehicle stocks for consumers.
Executive Summary
SWOT Analysis
Cameroon Political SWOTs
Cameroon Economic SWOTs
Cameroon Business Environment SWOTs
Global Overview
Eurozone And EMs Pose Risks To 2012 Growth Outlook; US And Japan On The Rise
Table: Passenger Car Sales (Units), Jan-December 2011
Replacement Growth?
Industry Risk/Reward Ratings
Table: Sub-Saharan Africa Autos Risk/Reward Ratings
Regional Overview
BMI Highlights Its Favourite Opportunities In Sub-Saharan Africa
Macroeconomic Forecast Scenario
Table: Cameroon - Economic Activity
Industry Forecast Scenario
Table: Cameroon's Automotive Market, 2009-2016
Competitive Landscape
Market Overview
Company Monitor
JLR Investment Targets Increased Buying Power
BMI Methodology
How We Generate Our Industry Forecasts
Automobile Industry
Sources
- JLR
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