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Uganda Autos Market Research -2012

Uganda's new vehicle market is a tiny fraction of the total autos sector, with second-hand vehicles still the only affordable option for many consumers. Even then, sales of passenger cars are around two-thirds the volume of commercial vehicles, with buses comprising the lion's share as public transport is the most widespread means of getting around.

However, there are signs that new vehicle sales are growing, albeit at a much slower rate. According to the Uganda Motor Industry Association, sales of new vehicles for the first eight months of 2011 were up 3% year-on-year (y-o-y) to 1,785 units, compared with the 1,618 units sold the year before.

As in other countries in the region, the growth has been spurred by a healthy construction sector, which has generated demand for trucks and heavy vehicles. The data show that out of the total vehicles sold, 984 were pick-up trucks, while passenger car sales comprised 377 estates and 227 sedans.

According to local dealers, access to financing is boosting growth in the new vehicle market. Some banks will finance a larger percentage of the cost of a new car than a second-hand one, as a new one will be less of a risk. The Development Finance Company of Uganda Bank offers 100% financing for new trucks and buses. However, the data show that bus sales have not spiked as expected in preparation for the phasing out of 14-seater vans used as buses.

In the new car market, Toyota Uganda is the undisputed leader. In the first eight months of 2011, it accounted for 718 of the 1,785 new vehicles sold, equal to a market share of around 40%. It was followed by Motorcare Uganda with sales of 309 units and Skenya Motors with sales of just 34 units.

There is also a thriving motorcycle market in the country, which has attracted investment in local production. In February 2011, the local distributor for Yamaha Motor motorcycles, Nile Fishing Company, opened the country's first motorcycle assembly plant. The UGX18.8bn facility has a daily production capacity of 50 units, but the company plans to expand the plant by March 2013, to have five assembly lines producing a total of 250 bikes per day. The first model to be built at the plant is the Yamaha Crux, which is often used for commercial purposes, but other models will be added.

Meanwhile, the first signs of a domestically designed car have come from a Ugandan university.

Makerere University's College of Engineering, Design, Art and Technology has unveiled its own electric vehicle (EV), the Kiira EV, which has been developed and produced by students over a three year period. While the car meets the brief of showcasing local skills and innovation, BMI believes the country's underdeveloped power generation capacity means it is unlikely that widespread usage of EVs will be a viable option any time soon.

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