DP World has launched a fully integrated logistics solution to assist OEMs expand their presence in South and Sub-Saharan Africa.
According to a report by research company, Mordor Intelligence, Sub-Saharan Africa is projected to be among the fastest-growing automotive markets globally, with vehicle demand expected to increase by 28.5 per cent by 2030.
Such a burgeoning growth will be driven by rising incomes, urbanisation and surging intra-African trade, the report said.
While vehicle demand grows, the African continent accounts for only about one per cent of global vehicle sales, the report found.
Attempts to expand their presence across Africa have been hindered for global OEMs, due to a combination of a lack of dependable logistics infrastructure, complex regulatory requirements and unreliable parts distribution.
After investigating reasons for the market strains, DP World has developed what it sees as a new turnkey logistics solution, particularly viable for Sub-Saharan Africa.
The first hybrid model developed in the region blends contract logistics and tailored market-entry and expansion services on a unified platform.
The solution features nationwide distribution to most dealerships within 24 to 48 hours, a digital dealer portal offering SKU (Stock Keeping Unit)-level inventory visibility, real-time tracking, automated ordering and integrated payments.
DP World’s end-to-end support solution was piloted with Foton Motor, a leading Chinese commercial vehicle manufacturer, to great success.
Utilising the platform, Foton Motor South Africa was able to establish aftermarket operations in South Africa for their heavy commercial vehicles, including warehousing, nationwide distribution, regulatory compliance and digital dealer enablement.
With the success of the South African venture, DP World is looking to support Foton with its global supply chain operations, including in the APAC region.
The hybrid model allows OEMs to build first-mover advantage in a region where after-market parts are often dominated by informal players and grey imports.
By offering a reliable service network with a single point of contact, OEMs, like Foton, can establish secure long-term customer relations and reduce the risk of counterfeit parts.
DP World Global Vice President & Vertical Lead for Automotive, David D’Annunzio, emphasised the strategic impact of the new platforms.
“The demand for vehicles is booming in Africa, but the difficulty is ensuring vehicles and parts can reach where they are needed, when needed,” said D’Annunzio.
“Our turnkey solution will change the game for OEMs, removing the traditional friction points and allowing them to scale their operations.
“This is the new blueprint for OEM expansion in Africa.”
Foton International President, Fu Jun said: “Growing our presence in South Africa is a priority for Foton, and our work with DP World has played an important role in making that possible.”
“Their support with unlocking market and contract logistics services has helped make our aftermarket operations efficient and straightforward, allowing us to concentrate on serving our customers and building our business.”
DP World’s Chief Operating Officer for Logistics at Sub-Saharan Africa, Mark Rylance said: “The automotive industry’s outlook for Africa is changing fast.
“The question is no longer whether to enter the market, but how to do it effectively. “With extensive infrastructure across the region, and deep expertise in complex logistics and market solutions, DP World is ideally placed to support international automakers looking to enter or expand into one of the world’s fastest-growing automotive markets.”
DP World expects to create more innovative solutions to support additional OEMs entering markets across Sub-Saharan Africa over the coming years, as it scales its offering to meet growing demand for commercial and passenger vehicles in the region.
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