Market Trends of Tanzania Used Car Industry
Rising Adoption of Digital Technologies Will Foster the Growth of the Target Market
The adoption of advanced technology by tech-savvy young individuals, the emergence of e-commerce marketplaces, and various companies' aggressive strategies to spend on online advertisements are boosting the demand for used cars sold through online platforms. These platforms assist consumers in making informed decisions as end-end information on vehicles is already listed, such as vehicle make, model, kilometers driven, engine capacity, condition, etc.
Moreover, increasing Internet penetration rates and rising urbanization rates across Tanzania contribute to developing an efficient ecosystem wherein vehicle owners can reach out to buyers from different parts of a region and initiate a smooth online sales process without any need to visit a physical location.
The Internet penetration rate in Tanzania stood at 31.6% in January 2023, an increase from January 2022, when the internet penetration rate stood at 31.0%. According to the World Bank, the urbanization rate in Tanzania stood at 37% in 2022, compared to 2018, when the urbanization rate stood at 34%. These consumers are highly tech-savvy, and most of them have the financial capability to make an informed decision to purchase a vehicle for their mobility. Owing to these factors, the online used car market in Tanzania is expected to showcase positive growth in the coming years.
To gain a competitive advantage in the lucrative online used car market, various players from Japan are actively engaging in tapping the cross-border sales opportunity with a focus on exporting Japanese-made used cars to Tanzania, as customers in Tanzania have a high preference for Japanese brands such as Toyota.
With the increasing nternet penetration and usage of online classified platforms for making purchasing decisions, consumers can buy second-hand cars from their foreign countries, which helps them get a better price for used car models. Tanzanian companies also have an opportunity to expand their business presence by providing cross-border sales service to countries such as Uganda, Zimbabwe, etc., which will assist them in enhancing their business performance.
Further, improved offerings such as an enormous number of photos and videos of the used vehicles being sold through online platforms and easy online instant finance, insurance, and warranty service are expected to fuel the demand for used cars in Tanzania in the coming years.
Used Sports Utility Vehicles (SUVs) to Remain the Preferred Vehicle Type in Tanzania
Based on vehicle type, used SUVs remained the preferred choice of consumers willing to purchase used cars in the Tanzanian market. It is estimated that sales of used SUVs contribute to the majority share of approximately 36% of the overall used car sales.
Some of the top-selling used SUV models in Tanzania were the Toyota Land Cruiser, Toyota Harrier, Toyota IST, Lexus LX, and Toyota RAV4, among others, as of 2023. Japanese-made used SUV models are the top choice of consumers in Tanzania.
As per the listings in CarTanzania, a used car online classified platform, 56% of used car listings on their platform were in the price range of USD 100 to USD 4,300. The majority of the used cars sold are concentrated in the Dar Es Salaam region, contributing to the highest share of 90%.
Further, consumers in Tanzania prefer diesel-operated used cars compared to their counterparts. It has been estimated that sales of diesel-operated used cars contributed to approximately 82% of the overall sales, followed by a petrol-operated used car with a share contribution of 18%.
Although electric used cars have not gained much prominence for Tanzanian customers, with the aggressive push by the government to promote the adoption of electric vehicles, the market for used electric vehicles (EVs) will gain traction in the coming years. Foreign used car platforms such as SBT Japan have initiated the process of offering used EVs to Tanzanian customers. As the EV market matures in the coming years, the market for used EVs will witness rapid expansion. It is anticipated that used electric SUV models will gain massive traction in the coming years with the increasing investment in developing charging infrastructure in the country, coupled with lowering prices of used electric SUV cars.
