Page 7 - EXPORT GUIDE 2 AFRICA

2 Automobile Spare Parts

THE MARKET IN AFRICA

Most of the African buyers are buying Dealers of the genuine spares say that they
substantial quantities of automotive batter- don’t feel any threat from the used spare
ies, tyres, spare parts, ball bearings, water parts market simply because new genuine
pumps and a host of electronic goods from parts are purchased by only those who can
Dubai for selling them at a pro t in their a ord them and more particular about the
own countries. "The African customers trouble-free running of their cars. Some of
price-sensitive - they are looking for low the spare parts dealers consider used parts
priced goods and are not much concerned as direct competition to duplicate parts
about the quality aspect," says Ahmed of because of the price margin between the
Popular Tyres Trading, one of the largest two are close than new genuine parts.
stockists of tyres, tubes and batteries in the
UAE. "Chinese tyres are in great demand in People prefer buying used spare parts
African markets as they are cheap and because they are genuine and are often in
provide excellent value for money," he says. good condition. Every spare parts outlet
may not provide the full range of used parts
With price taking the upper hand over of all car models but together the market is
quality for many buyers, the market for capable of providing nearly 90 per cent of
substandard spare parts will always exist. such parts. The majority of second hand
This is a demand that many manufacturers spares end up in the local UAE market, with
and dealers are all too keen to satisfy. While customers coming from nearby GCC states.
some of the cheaper spares are imported On the other hand, almost the entire stock
through the proper channels, there is also a of imported used engines is re-exported.
signi cant area of parallel imports of spare
parts. Illegal imports from neighbouring Used engines are in good demand in many
countries have been increasing at antyres African and Asian countries, especially those
from dubaialarming rate since 1991 when with big re-conditioned car markets. The
imports grew from Dhs 13 million to Dhs 51 diversi ed range of used mechanical and
million in 1994. A consequence of such body parts of cars and engines has brought
imports is loss of income, loss of business, this business parallel to genuine and
loss of reputation and credibility and deteri- non-genuine new spare parts businesses as
oration of the brand image. This not only it o ers big variety at a ordable prices.
deprives the government of much needed Dubai has rightly developed a reputation as One of the most extraordinary new trends in
income but also gives the illegal importer an being a buyer’s market. a glance at the the UAE since the daewoo spare parts dubai
unfair pricing advantage over the autho- prices of various products con rms that no 1990s has been the explosion in the number
rised agent. other place in the Middle East provides such of visitors from the republics of the former
a variety of goods at such low prices. Soviet Union lured by the many ways
The used spare parts market in the UAE is as money can be made in the Gulf. Enterprising
old as that of automobiles. In the last ten The decisive factor is that over the decades, Russians have been travelling to Dubai on
years, it has become a full- edged Dubai has developed a substantial commu- specially-chartered ights to buy as many
multi-million dirham business involving a nity of retailers, a sophisticated import products as they can carry for re-sale at
large number of small and large enterprises system and substantial warehousing for huge pro ts at home. An estimated 100,000
spread all over the country. Many such stock. This has lead to the emergence of a tourists from the former Soviet republics
outlets also deal in used engines which they keenly competitive market that ensures that travel to the UAE each year. Each visitor is
import from Japan and then re-export to prices in Dubai are as much as 10 to 15 per estimated to spend a minimum of $10,000
many African & Asian countries, including cent lower than in neighbouring markets. in local shops. More than a quarter of this
Russia, India, Egypt, Iran and Pakistan. “Dubai continues to be number one for goes on automobile spare parts and related
Second hand spare parts normally come buying anything from second hand cars to products. As the spare parts trade to Africa
from damaged cars sold by insurance automobile spare parts and ballbearings,” gains in stature, there is bound to be new
companies & police auctions. These agents says Pradeep Gupta of Ameeco Marketing, a demands from within the African market.
sell mechanical parts at 25 per cent of the leading supplier of ball and roller bearings. The UAE, with its strategic location and its
price of new genuine parts but the body Analysts say sales of automobile spare parts well established distribution network, can
parts, which are in more demand, are often and accessories in the Gulf has risen by reap rich dividends by catering to the
sold at around half the price of new ones. 20-25 per cent in 1997 despite the sharp oil increasing demand for automobile spares,
The rates, however, vary from part-to-part price fall in the year. Several reasons are ball bearings and lubricants in the fast
subject to the condition & availability. cited for this development. developing markets of Africa.