African car sales head towards 2m mark: GM

Annual vehicle sales in Africa will rise nearly 20 per cent in the next two years to hit the 2 million mark as the continent's burgeoning middle class trades up from motorbikes and jalopies to new cars, the regional head of General Motors (GM.N) said.

The US car giant sold 180,000 vehicles on the continent last year, giving it a 10 per cent market share and putting it narrowly behind rival Toyota (7203.T), which recorded African sales of 237,000.

However, of GM's total sales, 100,000 went to North Africa and 70,000 to South Africa, leaving only 10,000 to the impoverished but fast-growing countries in between.

"That's where we see the huge opportunity for growth," GM Africa managing director Mario Spangenberg told the Reuters Africa Investment Summit in Johannesburg.

Although Africa offers enticing growth, sales volumes remain a drop in the ocean for GM, which sold 6 million vehicles last year outside its traditional US market.

As well as benefiting from the expanding overall market in one of the world's fastest-growing regions, Spangenberg hopes to increase GM's market share with models such as the Isuzu pick-up, which has proved resilient to Africa's rugged conditions.

"We want to defend our 10 percent and maybe grow it a little bit," he said.

Of Africa's 40-odd sub-Saharan frontier markets, Nigeria - the continent's most populous nation and its biggest oil producer - is the most attractive prospect, Spangenberg said.

"The next big market growth will be in Nigeria, where we have no presence. It will take a while," he said. "We need to do a better job there."

He also dismissed concerns that the arrival of Indian manufacturers such as Tata Motors (TAMO.NS), with its experience of making and selling cars in relatively low-income markets, threatened GM's African expansion plans.

"The international competition is going to get tougher no matter where you are," he said.