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Japanese motoring giant Honda is to expand into the African continent as its southeast Asia markets near maturity
Across the African continent, motorcycles are used for everything from couriers to taxis to transport to work. Honda owns 35 per cent of the worldwide motorcycles, with over 17mn units sold in 2015.
As established motorcycle markets in Asia such as Vietnam, India, Thailand and Indonesia are where Honda have a stronghold, especially as the Japanese giants made the first move in region. However, as these markets have matured, Honda are concerned about market saturation and are looking to move into other areas.
Shinja Aoyama, Honda's chief operating officer for motorcycling operations told Business Beat last week that, "We don't expect much expansion in these markets."
"We believe there's room for the motorcycle industry to expand in Africa. There is huge potential." Aoyama also added that there is a huge opportunity for two wheelers, particularly boda bodas in Kenya and okada in Nigeria.
As it currently stands, the entire African continent only accounts for around one per cent for the Japanese giants worldwide sales. On average, Honda sell between 3.5mn and 4mn units in Africa, with Nigeria and Egypt taking the lions share.
However, one of the challenges for Honda in the region are Chinese and Indian motorcycle manufacturers who are producing much cheaper motorcycles, yet with unproven reliability and maintenance records. Therefore, Honda will try and sell its bikes on basis of value driven machines, steeped in history with a proven reliability record.
With a factory in Nigeria, which was built in 1981, being joined by another in Kenya in 2013, there is a adequate growth strategy in place, particularly as small business owners need reliable machines to base their businesses on.