Buying a Used Car is the Norm in Africa
It’s a common fact that Japanese used cars are the most popular car models in Africa. Used cars business is a huge market in Africa. And Somalia is a prime example of this.
Somalia is a country ravaged by a civil war for more than 25 years. For that reason, the majority of people in Somalia are not in a better position to buy new cars because of their economic condition. For them, buying used cars was the easier and convenient option. Now, it is even the norm. No one asks you why you bought a used car.
In Somalia, the traffic in the bigger cities is dense and there are many modern car brands. The most famous brands are Toyota, Booma, Suzuki, Nissan, and Mitsubishi. The most popular models are:
- Toyota 4Runner
- Toyota Land Cruiser
- Toyota Vitz
- Suzuki Alto
- Toyota Verso
You just have to make your choice to find the car that suits your budget and your personal needs.
The Role of Middlemen
Having this consumer information, Somali businessmen tried to start businesses selling used cars from Japan. Why Japan? Because Toyota spare parts are available everywhere in Africa. Therefore, the local availability of spare parts of Japanese car models made them more popular than car models imported from Europe or Northern America. This makes cheap when fixing the cars later just in case a technical problem arises.
But, then there is another problem: local Somali businessmen don’t have a direct relationship with Japanese car dealers. Instead, there are Somali middlemen who stay in Dubai and are directly connected with Japanese car dealers. These Somali businessmen in Dubai receive car orders from Somalia and forward to their partners in Japan. The Japanese used car sellers ship the cars to Dubai and the Somali middlemen forward to ports in Somalia. That’s how it works.
Japanese Sellers Can Get Access to a Bigger Market
Instead of selling to Somali businessmen in Dubai, Japanese car dealers can create partnerships with local dealers in Somalia and make them their local distributors. This approach offers a lot of opportunities for the Japanese car sellers. First, it expands their market and gives them access to new customers since they are directly connected to the local market. Second, the used cars become cheaper in this way since there are no middlemen who raise the price in order for them to make a profit in the process. This method is producer-to-consumer sales. No middlemen mean no price increase.