We live in a world where buying a vehicle is no longer a luxury available to the select few. The automotive industry has become more accessible to the common man but there is no guarantee that this positive trend will last. With the ever-changing nature of the market, the industry is having to adapt constantly

There is no reason to believe that the automotive industry will fade away given the numbers they have been pulling in over the last few decades. More and more people around the world own their own vehicle even if some make use of public transport to go to work. Mauritius is no different according to official numbers from the National Transport Authority (NTA). For the month of January to March of this year, 2,635 new vehicles were registered at the NTA, highlighting the fact that the industry is in good health.

The more impressive numbers come from a comparison of registered vehicles at the NTA over the last decade. In 2006, there was a total of 319,440 vehicles registered in the country, including 91,911 cars and 33,936 motorcycles. The numbers have systematically gone up since, averaging a percentage increase of over 4% every year. As of February 2017, there are 511,139 vehicles registered at the NTA, with 204,931 cars and 83,666 motorcycles. With these numbers, there should have been little reason for concern for the industry in Mauritius but there are inevitable challenges.

Competition

The automotive market in Mauritius is crowded with several entities involved in car dealership covering most of the popular brands in the world. While that has arguably benefited the consumer, who gets more bargaining power and possible choices, the automotive industry is becoming more and more competitive for suppliers.

However, in Mauritius at the very least, car dealers manage to thrive by selling a variety of different cars, ranging from luxury cars to compact cars suited to the streets of Port Louis. They each have their own markets even though the major companies in the Mauritian automotive industry control the lion’s share of the market. For the time being, the industry has been better off with the increased competition.

Traffic congestion

This is a controversial issue given that there are two different schools of thought on the subject matter. On the one side, there are people who believe that there are far too many cars on the roads given the population of the country. According to them, it is this growing number of cars that is causing the major traffic congestion in the island. On the other hand, there are those who believe that the main cause behind traffic congestion is the inadequate road infrastructures. “We believe that traffic congestion has more to do with the current infrastructure. We do agree that the number of vehicles (including the two wheelers) are increasing year after year but unfortunately, the road network and infrastructure have not followed suit,” Andrew Liu Man Hin, CEO of E.A.L Man Hin & Sons Ltd, told Weekly.

There are cases to be made for and against both sides. However, with the automotive industry opening up more and more to the average citizen, the road infrastructure will ineluctably have to adapt to accommodate the number of vehicles on the streets.

Public transport

Metro Express anyone? One of the biggest capital pro jects in the history of the country, the Metro Express, aims to be an alternative means of transport for the thousands of people heading to the capital every day. While aiming to be the solution to the traffic congestion issue in the island, it might eventually also bite into the automotive market.

However, with buses not yet up to the standard and the Metro Express only expected to go from Curepipe to Port Louis, the population is not likely to give up on their individual means of transportation just yet. As a matter of fact, it would take massive investment into a sophisticated public transport system for the automotive market in Mauritius to feel the damage on its sales.

Price of petrol

Earlier this year, Ashit Gungah, minister of commerce, announced that the price of petrol would increase, with the financial burden now firmly on the consumer, which in this case has to do with vehicle owners. The price of unleaded petrol rose from Rs38.85 per litre to Rs42.70 per litre, representing an increase of Rs3.85 per litre (9.9%). As for the price of diesel, it rose from Rs29.50 to Rs32.45, representing an increase of Rs2.95 per litre (10%). A motion to disallow this rise in price was even presented to parliament but it was eventually rejected.

In the short run, this increase in the price of petrol can become a major source of concern for people who barely managed to afford a vehicle. However, it would be unfair to say that the automotive industry will suffer from this rise in price given that travelling is often considered as an essential commodity. It will be other commodities that will have to be sacrificed to make way for an increased budget for petrol. “I don’t think the price of petrol affects us negatively because we are using it to our advantage to advertise cars with more efficient engines, which consume less petrol,” Shams Sooltangos, sales and marketing manager at Allied Motors, told Weekly.

With all that being said, there is no doubt that the automotive industry is set to face challenging times ahead. However, given the market in Mauritius and the poor public transport system, the industry is set to thrive for years to come.

For more views and in-depth analysis of current issues, subscribe to Weekly for as little as Rs110 a month. Free delivery to your door. Contact us: touria.prayag@lexpress.mu