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Motor Vehicle Industry Botswana

The Motor Vehicle Industry in Botswana 2021

Charles Chinya | Botswana | 03 December 2021

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Report Coverage

This report focuses on the motor vehicle industry, including dealers, importers, exporters, parts manufacturers, and vehicle finance organisations. It includes information on car and tyre production and imports, most popular ranges, trade and factors that influence the industry. There are profiles of 28 companies including local operations of South African and international companies, such as Barloworld Equipment and Bridgestone, dealerships such as Naledi Motors and Webb’s Motors, fitment centres such as Mega Tyre and Taurus Batteries, and parts companies including Earthmoving Replacement Parts.

Introduction

This report focuses on the motor vehicle industry, including dealers, importers, exporters, parts manufacturers, and vehicle finance organisations. Botswana’s motor industry is largely an importer of vehicles, with new vehicles mostly imported from South Africa and second-hand vehicles from Japan. In 2020, 41,733 vehicles were registered (representing vehicle sales) compared to 67,434 in 2019. The decline is attributed to the pandemic. In Q4 2020, first time registration increased by 21% compared to the previous quarter. Of these, 87.7% were used vehicles, 18.2% were new vehicles and 0.1% were rebuilt vehicles. There has been increased demand for second hand cars imports, with 72.8% of used imports coming from Japan and 17.3% from South Africa. The tyre industry in Botswana is composed of fitment, franchised shops and retail outlets. Major fitment and franchised shops are mostly representatives of South African companies and there are a number of locally-owned and foreign-owned outlets. The tyre industry in Botswana is largely import-driven with no new tyre manufacturing taking place, although retreading takes place at a small scale. During 2020 Botswana imported US$36m of tyres, up from US$35.6m in 2019.

Strengths

• .Strong support from government financing agencies.
• Botswana’s proximity to the South African automotive market.
• Good labour-employer relations.
• Manufacturers enjoy one of the most competitive tax regimes in the region.

Weaknesses

• Fuel imports from South Africa lag behind international quality standards.
• Limited market size.
• Long procedure of licencing car dealers.
• No clear policy and incentives for production of electric vehicles.
• No fuel refineries.
• Shortage of highly specialised skills.

Opportunities

• Dealer Finance in the used vehicle Asian market.
• Increase in imports of used Asian vehicles
• Increase of automotive components exports to South Africa and the African region.
• Manufacture of retreads (excluding passenger vehicle tyres).
• Manufacture of tyres especially for export.
• Most trucks that transport goods into Botswana from South Africa and the region are foreign registered, and there is a need for more local investors in trucking to the enter the cross-border market.
• Opportunities in the public transport system particularly the minibus sector.
• The African Continental Free Trade Area offers tyre manufacturers an opportunity to export to the rest of Africa.

Threats

•  Fluctuation of the local currency against the dollar can cause price increases of vehicle and imported inputs in the manufacturing of automotive components.
• Potential water shortages may impact the manufacture of tyres.
• Rising costs of utilities and labour costs.

Outlook

Bank of Botswana forecasts 6% GDP growth in 2021 following a contraction of 7.7% in 2020. The automotive sector relies heavily on financial institutions for the granting of credit for the purchases of vehicles. Since the start of the pandemic, financial institutions had taken a cautious approach to granting loans. A number of financial institutions such as Letshego, Access Bank (formerly BancABC) and First Capital Bank are running personal loan promotions with increased loans amounts and longer repayment periods. Industry players expect an increase in demand for new and used vehicles, which will filter into the tyre industry. Construction and mining tyres demand is anticipated to grow. The growing number of construction projects being undertaken in Botswana due to the rise in urbanisation is likely to fuel growth in sales of tyres used on construction vehicles. The World Bank in June 2020 approved a US$250m designed to support reforms to strengthen private sector development (including automotive components manufacturing) and promote economic recovery.

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The Motor Vehicle Industry in Botswana
The Motor Vehicle Industry in Botswana 2021

Full Report

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Table of Contents

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PAGE
1. INTRODUCTION 1
2. COUNTRY INFORMATION 1
3. DESCRIPTION OF THE INDUSTRY 2
3.1. Industry Value Chain 6
3.2. Geographic Position 6
4. SIZE OF THE INDUSTRY 7
5. STATE OF THE INDUSTRY 8
5.1. Local 8
5.1.1. Trade 16
5.1.2. Corporate Actions 18
5.1.3. Regulations 19
5.1.4. Enterprise Development and Social Economic Development 21
5.2. Continental 22
5.3. International 28
6. INFLUENCING FACTORS 33
6.1. COVID-19 33
6.2. Economic Environment 34
6.3. Rising Input Costs 34
6.4. Government Incentives and Support 34
6.5. Environmental Concerns 35
6.6. Electric Cars 36
6.7. Clean and Efficient Fuels 36
6.8. Tyres 36
6.9. Labour 37
7. COMPETITION 38
7.1. Barriers to Entry 39
8. SWOT ANALYSIS 40
9. OUTLOOK 41
10. INDUSTRY ASSOCIATIONS 41
11. REFERENCES 42
11.1. Publications 42
11.2. Websites 42
APPENDIX 1 44
Summary of Notable players 44
COMPANY PROFILES 47
Auto World (Pty) Ltd 47
Bamangwato Motors (Pty) Ltd 49
Barloworld Equipment Botswana (Pty) Ltd 51
BB Motors (Pty) Ltd 53
BH Botswana (Pty) Ltd 55
Bridgestone Botswana (Pty) Ltd 57
Buffalo Treads (Botswana) (Pty) Ltd 59
Car World (Pty) Ltd 60
Carfil Services (Pty) Ltd 61
Chouhan Motors (Pty) Ltd 63
Commercial Motors (Pty) Ltd 64
Construction Tyres Botswana (Pty) Ltd 66
Delta Automotive Technologies (Pty) Ltd 67
Earthmoving Replacement Parts (Pty) Ltd 69
Kim's Auto Electricians (Pty) Ltd 70
Komatsu Botswana (Pty) Ltd 71
Kromberg & Schubert Botswana (Pty) Ltd 73
Lesedi Motors (Pty) Ltd 74
Mega Tyre Company (Pty) Ltd 76
Motor Sales & Services (Pty) Ltd 78
Naledi Motors (Pty) Ltd 79
Rola Botswana (Pty) Ltd 81
Ruprah Motors (Pty) Ltd 83
Scania Botswana (Pty) Ltd 85
Specialised Panel Beaters (Pty) Ltd 86
Taurus Batteries (Pty) Ltd 87
Tswana Bus Builders (Pty) Ltd 89
Webb's Motors (Pty) Ltd 90
Yarona Corporation (Pty) Ltd 92
Zadon (Pty) Ltd 94
Zambezi Motors (Pty) Ltd 95