Tanzania Used Car Market Size (2024 - 2029)

Tanzania Used Car Market Analysis

The Tanzania Used Car Market size is estimated at USD 38.5 million in 2024, and is expected to reach USD 55.66 million by 2029, growing at a CAGR of 7.65% during the forecast period (2024-2029).

Consumers' increasing preference towards availing imported used cars from Japan, the emergence of online auto platforms, and low demand for new vehicles owing to their higher prices serve as the major determinants for the growth of the used car market in Tanzania.

The market for new passenger cars in Tanzania is relatively smaller, with only 2,000-3,000 units being sold annually on average. In 2022, it was estimated that only 3,153 units of new vehicles were sold in Tanzania.

The low demand for new cars is attributed to the higher price of these vehicles, which customers cannot afford, and therefore, prefer availing imported used cars, especially from Japan. Further, consumers' growing concerns about the increasing unemployment rate (as a % of the labor force), which rose to 2.8% in 2022 compared to 2.7% in 2021, negatively impact the purchasing power of consumers, thereby acting as a catalyst for the falling demand for new cars in Tanzania.

One of the major challenges faced by the used car market is the increasing fuel prices across Tanzania, attributed to the removal of fuel subsidies, changing oil prices in the global market, and devaluation of Tanzanian shilling against US dollars.

According to Tanzania's Energy and Water Utilities Regulatory Authority (EWURA), the cost of fuel increased by at least 17% in August 2023 compared to the previous month. A liter of petrol in the country's commercial capital, Dar es Salaam, was retailing at Tsh 3,199 (USD 1.30) in August 2023 from Tsh 2,736 (USD 1.11) the previous month.

A liter of diesel in August 2023 was priced at Tsh 2,935 (USD 1.20) from Tsh 2,544 (USD 1.04) in July 2023. Increasing fuel prices negatively impact the demand for availing private transportation mediums. As the Tanzanian passenger car market is dominated by the used car sector, a rapid surge in fuel prices might potentially deter these customers from purchasing used cars.

The government's aggressive strategy to promote the electrification of vehicle fleets to promote the reduction in carbon emissions will aid the demand for used cars across Tanzania during the forecast period. Consumers who are willing to purchase cheaper alternatives to new-energy vehicles are increasingly adopting the purchase of used vehicles for convenience in mobility. For instance, in April 2023, the government of Tanzania reaffirmed its support to promote e-investments in the mobility sector and enhance electric vehicle charging infrastructure across the country. 

According to UN-Habitat & the Urban Electric Mobility Initiative (UEMI), the electric vehicle parc in Tanzania touched 5,000 units as of April 2023, the highest in the East-African region. Even with the aggressive stance of the Tanzanian government to promote the adoption of electric vehicles (EVs), the higher cost of electric vehicles adds to the financial burden of the consumer attributed to its high battery cost, thereby, in turn, making the consumers opt for used cars in the coming years.

Tanzania Used Car Industry Segmentation

A used car/pre-owned vehicle, or a secondhand car, is a vehicle that previously had one or more retail owners. A certified pre-owned (CPO) vehicle, on the other hand, is a pre-owned vehicle that has been extensively inspected (pre-purchase inspection) and expertly reconditioned. The Used Car Market consists of a wide range of companies involved in the purchasing and selling of pre-owned vehicles through online or offline sales channels.

The Tanzania used car market is segmented by vehicle type, vendor type, fuel type, and sales channel. By vehicle type, the market is segmented into hatchbacks, sedans, and sports utility vehicles (SUVs)/multi-purpose vehicles (MPVs). By vendor type, the market is segmented into organized and unorganized. By fuel type, the market is segmented into petrol, diesel, electric, and others (liquefied petroleum gas, compressed natural gas, etc.). By sales channel, the market is segmented into online and offline.

 The report offers market size and forecast value (USD) for all the above segments.