Annual transport expenditure in Africa is estimated at over $60bn, yet there is still no appropriate form of transport for the degraded roads that plague much of the continent.
Furthermore, transport spending by those at the bottom of the pyramid (annual household income less than $3,000) accounts for 39% of the African market (World Resources Institute). This demographic represents a vast market-based opportunity to provide affordable, practical and safe transportation for those that need it most. Solving a dire social problem with an even greater market opportunity.
The global automotive industry is highly capital intensive and due to the lack of domestic manufacture, international import of vehicles is common in Africa. Unfortunately, existing international vehicle production has maintained a bias towards the developed world. Thus, the standard vehicle design, manufacture and sale process has become tailored to consumers who reside in the world's most affluent countries, a relatively unique demographic.
Existing manufacturers compete to serve a developed world need for features, styling, price, performance and space; producing vehicles that – even in economy class – are out of reach and inappropriate for most of rural Africa. So while substantial in number, the affordability and practicality of the vehicles imported into Africa is far from optimized.
The most affordable vehicles (typically auto rickshaws and motorbikes) lack much of the functionality such as storage, terrain coverage and handling required by the low income rural consumer and are thus mainly concentrated in urban areas where the need for such features is less. Mobius offers a safer, more practical transport mode, critically at a competitive price.
National transporation markets in Africa are predominantly urban and the option to buy a vehicle is usually afforded only by those in the middle and upper income brackets. The result is a lack of mobility for many low income consumers in rural areas unable to afford a vehicle and offered little or no public transport service. Our target customers are low and middle income consumers residing in both urban and rural areas. Our demographic represents both a critical social need and a vast market demand.
We surveyed over 1,500 buyers and users across Kenya to learn more about the need for transportation generally, and to understand the key purchase criteria for our target customers specifically. The hundreds of people we have spoken to care far less about standards of comfort (such as air conditioning, automatic windows, leather seats etc.) or aesthetics than they do vehicle handling, terrain performance and crucially, the cost to purchase, run and maintain a vehicle. Thus, our vehicle is orientated towards a new set of design fundamentals tailored to the demands of this underserved demographic.
While the majority of vehicle manufacturers do not target the poorest consumers, there are various companies such as Tata Motors and Mahindra & Mahindra in India who produce extremely economical vehicles. Critically however, they target emerging urban markets and thus simply offer more basic versions of traditional vehicles, retaining many of the aesthetics of a “developed world” vehicle, made affordable by reducing functionality (reducing carrying capacity, suspension, wheel size etc.).
Instead of accepting the developed world vehicle fundamentals, we are embracing a new set of fundamentals – safety, practicality and affordability – fit for the developing world of the future. This change directly undermines the primary customer purchase criteria of the existing automotive industry and thus is not currently adopted. While there are no other commercially viable producers of tubular steel frame vehicles in Africa, our primary competitors are Piaggio and Mahindra, both manufacturers of the auto rickshaw and our seconday competitors are Tata and Nissan, manufacturers of low cost vehicles imported into Africa.