Africar, an online car marketplace operating in over 40 African countries, has partnered with Stellantis, the parent company of Maserati, Peugeot, Fiat, and Chrysler among other brands, to launch Auto24, a used car marketplace for Africa. Auto24 will launch in Ivory Coast, and Africar has plans to expand the marketplace across the continent over the upcoming quarters and years.
According to a report by the International Organisation of Motor Vehicle Manufacturers (OICA), Africa has about 50 million cars, accounting for only 1% of the total number of cars worldwide. The continent’s population is also estimated to grow to almost 1.7 billion by 2030, according to the United Nations.
Globally, the price of used cars has been falling and coupled with the demand for imported used cars in Africa, there is potential for the automotive industry in Africa. Echoing this in a statement, Xavier Duchemin, the Senior Vice President of Pre-Owned Vehicles at Stellantis, said, “This investment in Africar Group to create Auto24 reinforces our strategy to grow our used vehicle business activity globally in a bold, pragmatic, and agile way. It will follow the same blueprint as the other Stellantis investments in the used vehicle ecosystem. The founders will accelerate the development of their activities while capitalising on Stellantis yet maintaining the inventiveness, energy, and agility that characterises start-up companies.”
Since 2016, The Africar Group has enabled over 25 million car buyers and sellers to trade used cars through its online channels, slowly establishing itself as Africa’s leading online car marketplace network.
Speaking on the partnership, Axel Peyriere, the CEO and co-founder of Africar, said, ”Auto24 is being launched today with the aim of buttressing the confidence of African customers in the used vehicle market. A great challenge that will allow for a secure, convenient, trustworthy, and enjoyable experience when buying or selling used vehicles.”
It has been reported that West Africa imports approximately 70% of the total imported used vehicles in Africa. Although the majority of this can be attributed to Nigeria, Auto24 is launching in Ivory Coast. On a call with TechCabal, Peyrieire said that Ivory Coast was chosen because of its significance to francophone West Africa (Stellantis is a 50-50 cross-border merger between Italian-American Fiat Chrysler and the French PSA group) and the deep market understanding that Africar was able to gather in the country because of its partnership with CFAO. Ivory Coast also ranks as the 8th fastest growing economy in Africa, according to the IMF.
Last week, a similar deal was struck in North Africa as Carzami raised an undisclosed seed round to provide second-hand cars in Egypt. In a statement, the founders said that they project revenue to reach $30 million by 2024. Peyriere told TechCabal that while he acknowledged that the market was a big space, his company has “conservative but promising projections.” He added that the company projects $100 million in revenue in the next few years.
For Peyriere, Auto24’s business model is “simple.” He told TechCabal that the startup will buy locally used cars, recondition them, and sell them in Ivory Coast. The startup will offer customers what Peyriere calls “certified used cars.”
Auto24 wants to digitise the process of selling and buying used cars, which is often wrought with several problems on both sides of the transaction. For sellers, the startup will inspect each car based on its 100 points of inspection before accepting the car, service the car to its standard and then, offer its price.
The startup will base its pricing model on what Peyriere calls “a unique valuation system for Africa”. This system is based on the data that Africar has gathered for over six years. Peyriere said that Auto24 would use artificial intelligence to process this data.
This pricing model will differ from the rates offered by the average car dealer, and Auto24 wants to grow its customer base by offering unique services. The startup will offer customers a 5-day refund policy, a 6-month warranty on the car’s gearbox, engine, and powertrain, a 1-year roadside assistance package, and 1-year maintenance with AutoFast, CFAO’s servicing solution.
Peyriere, a serial investor in the ecosystem (his portfolio includes companies like Lazerpay, Treepz, and Appetito), told TechCabal that Auto24 will not only be limited to Stellantis brands and will offer cars based on demand. He added that this is because most of the used cars in Africa are Asian brands like Toyota and Suzuki.
On Friday, the 23rd of September, TechCabal in partnership with Moniepoint (by TeamApt) will host the most important players in tech and business on and off the continent to discuss the future of commerce in Africa. Register now to attend.