Auto Adspend slows, as attention shifts to Africa

Godwin Anyebe

A media agency network Zenith Media has predicted that advertising expenditure by automotive brands will grow by 0.8 per cent in 2019, down from 1.5 per cent in 2018.

The report was contained in Zenith’s inaugural Automotive Advertising Expenditure Forecasts, published recently.

Auto brands are expecting a tough year in 2019 as they face continued tension in trading relations, particularly between the US and China,

and the possible imposition of car import tariffs in the US making it more expensive for manufacturers to source raw materials and parts, as well as to sell across borders.

Zenith then forecasts 2.0 per centgrowth in 2020, when the Summer Olympics in Tokyo and the UEFA Euro 2020 football championships will provide valuable showcases for auto advertising.

This partly explains why major automakers are scrambling to get a bigger foothold on the African market, including Nigeria.

Nigeria’s auto market remains the largest in Africa, and the buying power of her middle class is increasing exponentially thus, presenting a huge opportunity in terms of consumption of auto products.

This is despite infrastructure challenges, the President/CEO Sub Saharan African Region, Ford Motor Company, Jeff Nemeth has said. The company plans to launch at least 30 new vehicles by 2020 in Middle East & Africa with the ambition to corner 50 per cent of the Nigeria auto market.

Nigeria’s annual new car market currently stands at over 50,000 but with projected growth, it can rise to as much 7.6 million in 2050.

Also ss part of its commitment to Africa and its 2022 midterm plan, Toyota is growing its presence on the continent, expanding industrial operations into new markets country by country.

First in South Africa, Nigeria, Egypt, then Kenya and Ghana in 2018, and now Algeria. With the new plant in Algeria, Nissan’s total potential capacity in Africa will increase to about 200,000 vehicles.

So while the auto adspend in Europe, Asia and America slows down, analysts expect a rise in adspend in Nigeria and other African markets because of the spike in competititon.

Meanwhile, global auto advertising is underperforming the ad market as a whole, which is growing at 4 per cent a year. New technology and evolving consumer needs pose a fundamental challenge to the way the auto industry does business.

Embracing green fuels, new connected technology and new models of ownership, as well as using new digital channels to reach active buyers online, will be key to unlocking faster brand growth over the next few years.