The Car and Truck Fleet and Leasing Management Magazine

Overview: South African Fleet Market

March 04, 2013, by Mike Antich - Also by this author

With a population of approximately 51 million people, South Africa has a diverse culture, 11 official languages, and is viewed as the gateway to Africa.

“However, the country has economic challenges with an unemployment rate of 26 percent, which represents 12.6 million people. Approximately 26 percent of the population lives on less than $1.25 per day,” said Jacqui Carr, divisional CEO for Eqstra, an integrated capital equipment and leasing provider with operations in South Africa and the UK. "There are no global fleet management companies represented in South Africa. Outside FMCs typically partner with local South African companies. Among these partners are banks, private leasing and transport companies, vehicle manufacturers, dealership networks, and rental companies."

The preference in South Africa is vehicle purchasing. Leasing has only made single-digit penetration in the automotive market.

“The total South African vehicle park is approximately 8 million vehicles (all categories), of which only 8 percent are on full-service leasing. Out of a population of 51 million, this represents approximately one vehicle for every 6.5 people. New-vehicle sales average about 500,000 units per year,” Carr said. “There are approximately 35 different vehicle manufacturers selling vehicles in the South African market. Those with local production facilities are BMW, Toyota, Nissan, Volkswagen, and General Motors.”

The total number of vehicles sold in South Africa is typically equal to the total sold in Sub-Saharan Africa. Every brand of vehicle, including Chinese-brand models, is sold in Africa.

“The challenges facing the South African fleet industry is a lack of effective transport infrastructure. The government is seeking to address this by investing heavily into resurrecting the railway systems. There is a widespread poor quality of roads, which increases the risk of accidents and contributes to higher maintenance costs. There is an enormous lack of technical skills in the labor force, such as mechanics, artisans, operators, and drivers,” Carr said.

Vehicle maintenance presents a key fleet challenge in South Africa because the service infrastructure is insufficient and fraud is rampant in the vehicle maintenance industry.

“There is widespread bad driver behavior. Also, there is a large amount of non-roadworthy vehicles on the roads. The government is seeking to remedy this by the introduction of the demerit point system. South Africa experiences approximately 800,000 accidents on its roads annually. Approximately 15,000 people die in road accidents every year. An average of 22 people are disabled per day in traffic accidents. South Africa is rated as the third worst country in the world on the basis of accidents per capita. Driver behavior is the single largest cause of accidents on South African roads,” Carr said.

--By Mike Antich

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