New insights from a sample of 55,000 car-related transactions on the Autochek platform has revealed that millennials are more likely to apply for car loans than any other age group, with 75 percent of applications, compared to 13 percent for Generation X, 11 percent for Generation Z and 1 percent for Baby Boomers.
The data, which covered transactions from Kenya, Ghana, Nigeria, Cote d’Ivoire and Uganda, and represents a subset of Autochek’s overall transaction volume, also suggests that millennials were the top purchasers of cars across the continent. In multiple markets, millennials were responsible for the most sales, with more than half of vehicles sold in some markets. Gen X was typically in second place in most markets, with Baby boomers and Gen Z following behind.
With increasing access to education, technology, and employment opportunities, many millennials in Africa are earning higher income, becoming increasingly financially stable and are seeking ways to improve their standard of living, including buying cars as a symbol of status and mobility.
When it came to the choice of cars, Toyota was the top choice and led sales across the markets surveyed, except for Côte d’Ivoire where Suzuki was the top choice. Despite Toyota being the preferred car, with 56 percent sales in Nigeria, 37 percent in Ghana, 46 percent in Kenya, 49 percent in Uganda, the data also shows that millennials were also purchasing luxury brands, such as Lexus and Mercedes Benz among others.
According to Johan van der Merwe, Chief Executive Officer of Autochek Financial Services, ‘The trend of millennials driving car sales and finance across Africa is expected to continue as this generation becomes more financially independent and the continent’s economy continues to grow. Our main focus at AFS is to improve institutional credit access for automotive transactions from the current average of 2% to 50% across Africa, and catalyse the benefits that come with improved mobility’.
Despite being a $45 billion industry, Africa’s automotive market only has a 2% financing penetration rate, compared with the average of around 60-75 percent in emerging markets. At the same time, vehicle penetration is low, with 44 vehicles per 1,000 people in Africa, compared to the global average of 180.
Autochek is building the financial infrastructure to drive the penetration of auto financing across Africa, powered by a data analytics engine that makes it easier for financial institutions to offer credit to consumers. It has a partner-led retail footprint of more than 2,000 dealers and workshop locations across Africa, which enables unparalleled access to insights into vehicle-related transactions. The company recently launched Autochek Financial Services, new arm of the business that provides best in class technology and advisory solutions to car dealers, financial institutions and other stakeholders in Africa’s automotive ecosystem, supporting them to improve credit decisioning, collections, pricing, portfolio management and product development, as well as deliver an enhanced customer experience.