Why did the sales of Chinese buses suddenly double in Africa?

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Why did the sales of Chinese buses suddenly double in Africa?

Automobile financial report

2026.11.10 17:53

· From overseas

Full text 3515 words

Text | Automotive Financial Report

In August 2025, a serious bus accident occurred in El Harash, an eastern suburb of Algiers. A few days later, Algerian President Tebboune ordered the immediate import of 10,000 new buses to replace the country's old vehicles.

On January 8, 2026, 3,000 Higer buses were assembled at the Suzhou factory and sent to Algeria. This is the largest single export order in the history of Chinese passenger cars. In February, 650 Yutong buses were shipped. According to statistics from the Algerian media TSA, 5,650 out of 10,000 vehicles came from China.

A bus industry report just released by Zhongtai Securities shows that in the first nine months of 2026, China exported approximately 14,800 buses to Africa, a year-on-year increase of 115%. Africa's share of China's passenger car exports will rise from 23% in 2025 to about 37%.

Demand for passenger cars explodes in North Africa

The increase in passenger cars in Africa mainly comes from the three North African countries. Algeria, Egypt, and Morocco will enter the peak of passenger car renewal at the same time from 2025 to 2026, for different reasons.

Algeria's supply of new cars has been cut off for many years, and its fleet is severely aging. An accident released the backlog of demand.

Egypt is recovering. There will be a shortage of foreign exchange around 2023, and the automobile market will shrink for two consecutive years. After the Egyptian pound depreciated sharply in 2024 and obtained a loan from the International Monetary Fund, the supply of foreign exchange resumed. Passenger car sales increased by 53.6% in 2025 and by 88% in the first seven months of this year.

Morocco is the event. For the 2025 African Cup of Nations, Morocco purchased 723 Yutong buses at one time, which was the largest single order of Chinese buses in Africa at the time.

It will also co-host the 2030 World Cup with Spain and Portugal, plans to purchase 7,000 new buses by 2030, and transform the bus systems in 84 cities from 2025 to 2029. Morocco has no fuel subsidies and has included electric vehicles in its procurement plan, which is in sharp contrast to Algeria.

Three streams of demand collided at the same time. These three countries are the most populous countries in North Africa. Public transportation is organized by the state or city, and the procurement volume is large. Chinese brands have also been operating here for a long time. Higer entered Algeria in 2005.

Among the three countries, Algeria and Egypt are the most illustrative. They represent two completely different buyers.

The buyer in Algeria is the local government.

Import licenses are issued uniformly after the President's decision. After the vehicles arrive at the port, they are received by the Vehicle Industry Development Agency (EDIV) under the Military Manufacturing Directorate of the Ministry of National Defense, and then distributed to state-owned operators such as TRANSTIV and the Algiers City Bus Company. On April 9, the Ministry of National Defense handed over 908 vehicles at once. The money comes from the oil and gas finance, and the tax exemption limit is written into the 2026 fiscal policy.

Why do buses in Algeria often get into accidents?

The root cause of the disease was ten years ago. After oil prices plummeted in 2014, Algeria began to restrict the import of new cars in 2016 and wanted to replace them with local assembly. In 2019, the political situation changed, assembly plant owners were imprisoned one after another, the import of spare parts was also blocked, and the factories of Volkswagen and Kia successively suspended production. Algeria imported 450,000 cars in 2012, and after 2019 there will only be a few thousand cars left each year.

The supply of new cars has been cut off for nearly ten years, and passenger cars can only get older as they are driven. There are approximately 84,000 passenger buses in Algeria, of which 5,400 are over 30 years old and 28,000 are over 20 years old. The import of 10,000 vehicles is only the first batch.

Give a rough estimate of Algeria's weight. Reducing the 115% growth rate, China exported about 6,900 vehicles to Africa in the same period last year, and the increase this year was about 7,900 vehicles. Only half of Algeria's 5,650 vehicles were delivered in the first nine months, accounting for more than one-third of the increase.

The national unified procurement compares quotations and the production capacity of delivering thousands of vehicles at a time. The shortcoming is that industry insiders in Algeria point out that Chinese brands such as Yutong, Higer, and ZTO do not have authorized dealers locally. The car arrived first, and the after-sales network has not yet been established.

Buyers in Egypt are thousands of operators.

According to statistics from the Egyptian Automobile Market Information Committee AMIC, from January to July 2026, Egypt’s passenger car sales were 10,449 units, a year-on-year increase of 88%.

In August, Jinlv sold 377 vehicles, King Long sold 353 vehicles, and Toyota sold 313 vehicles in the same month. King Long and Jinlv both belong to the King Long Automobile Group, with a total of 730 vehicles, more than twice that of Toyota.

The more critical numbers are hidden in the composition. In 2025, 9,129 locally assembled buses were sold in Egypt, a year-on-year increase of 65.2%; only 2,214 complete vehicles were imported.

About 80% of passenger cars are assembled in Egypt. King Long has jointly built a bus assembly plant in Suez with Saudi company ATM Misr. Fleet operators prefer locally assembled vehicles because parts are easy to find and low cost.

Egypt is a fuel importer, with fuel imports worth approximately US$21 billion in 2025. Under the International Monetary Fund's US$8 billion loan program, Egypt has raised oil prices four times in two years. In March this year, diesel increased by 17%. Operators are particularly sensitive to vehicle prices, fuel consumption and accessory prices.

The differences between the two countries will directly rewrite China's export data. What China sells to Egypt is increasingly parts and technology, and the customs’ vehicle export volume does not reflect this part of the business.

Algeria is going the way of Egypt. In October last year, the government signed contracts with three local companies, Peng-Pu, EDIV, and Tirsam, to implement import and local assembly in parallel. The Minister of Transportation also stated that importing is only the first step, and the next step is to build a local bus factory.

When Algeria switches to local assembly, China's complete passenger car exports to Africa will drop. By then, the decline in numbers does not necessarily mean that Chinese buses have lost the market. The business will just change from complete vehicles to spare parts, technology and accessories.

Why do electric buses only account for 3% of exports?

In the first nine months of this year, China exported about 500 pure electric buses to Africa, accounting for about 3%. During the same period, new energy accounted for 69% of the passenger cars sold by China to Europe.

In addition to the weak local power grid and few charging piles, the more critical variable is the price of oil.

Diesel in Algeria costs 31 dinars per liter, or about US$0.23, second only to Libya in Africa and less than one-sixth of the global average price. Electricity prices are also subsidized, at about $0.04 per kilowatt hour.

A rough estimate based on this set of prices: a 12-meter bus runs 60,000 kilometers per year. A diesel vehicle consumes about 35 liters of fuel per 100 kilometers, and the annual fuel cost is about US$4,800; an electric vehicle consumes about 1.2 kilowatt hours of electricity per kilometer, and the annual electricity cost is about US$3,000. Switching to an electric car only saves about $1,800 a year. Electric buses are tens of thousands of dollars more expensive than diesel vehicles of the same class, and it will be difficult to recover them when the buses are scrapped.

In Algeria, electric buses lose out on price differences and have little to do with the quality of the power grid.

69% of Europe's sales are also driven by prices and rules. European diesel generally costs more than 1.5 euros per liter. The EU's Clean Vehicle Directive sets a minimum proportion of clean buses for public procurement, and various countries also add car purchase subsidies. China's domestic new energy buses have also been promoted with purchase subsidies and operating subsidies for more than ten years.

Wherever electric buses are popularized, there are people behind them who are paying for them. Europe's fiscal and carbon rules subsidize electric vehicles, and North African oil-producing countries' fiscal subsidizes diesel. Wherever the subsidies go, buses will go in that direction.

Ethiopia is the complete opposite.

It relies entirely on imported fuel, with diesel costing about US$1.1 per liter, nearly five times that of Algeria. Its electricity is mainly hydropower, and the price of electricity is very low. Starting from 2024, Ethiopia will ban the import of fuel-powered private cars.

Another example is Nigeria. After the liberalization of fuel prices, diesel is about US$1.2 per liter. Oil prices are expensive enough, but the power grid is unstable and charging has become a bottleneck. Oil prices determine whether electric vehicles are worth buying, and the power grid determines whether electric vehicles can be used.

For Chinese car companies, the progress of fuel subsidy reforms in various countries is a key factor affecting electrification.

Until then, Africa still needs fuel buses. Domestic public transportation has been electrified on a large scale. The chassis, engine, gearbox, axle and accessory system of diesel buses have been polished for more than 20 years, and their cost and reliability are very mature. This industrial chain, which has been completed in China, is continuing to receive orders in Africa.

Also selling cars in Africa, the profit difference is seven times

Yutong, King Long and Zhongtong are the three major bus companies in the A-share market. In the first three quarters of 2026, the overseas revenue of the three companies will account for more than half.

The overseas share is almost the same, but the net profit margin is about seven times worse. The gross profit margin of Yutong's overseas business is approximately 29.6%, which is 10.5 percentage points higher than that of its domestic business.

King Long's three brands, Xiamen King Long, Jinlv, and Suzhou King Long (Haiger), won the largest single order in Algeria, surpassing Toyota in Egypt, but the net profit margin was only 1.9%. The reason may be that the three brands have gone overseas separately, their channels and service resources are scattered, and they compete with each other in some markets, making it difficult to raise prices.

What Yutong is betting on is its service network. In September this year, Yutong announced that it had established sales and service networks in nearly 50 countries in Africa. In Algeria, Yutong specifically stated that its only local official partner is Peng Pu, and carries out maintenance technical training through it. Morocco's 723 Yutong buses first served the 2025 African Cup of Nations and were transferred to urban buses after the game. Subsequent maintenance, spare parts and vehicle replacement needs were all left in the hands of Yutong.

In a market where even authorized dealers are scarce, the service network itself is a barrier. The higher the vehicle attendance rate, the easier it is for the brand to obtain the second batch of orders, and the more confident the quotation will be. A large part of the 10 points that Yutong's overseas gross profit is higher than that at home comes from here.

Zhongtong's exports to Africa have grown at about 186%, and Africa will account for about one-third of its exports in 2025. Africa has brought the most significant growth to ZTO and also made it the most dependent on the single market.

In 2027, how much more will be left after this doubling?

In the past ten years, Algeria's car import policy has been adjusted back and forth: in 2016, it restricted the import of new cars, in 2019 it blocked the import of spare parts, and then gradually relaxed it after repeated iterations. Once the delivery of 10,000 vehicles is completed, the centralized import of complete vehicles will come to an end. 28,000 buses over 20 years old are still waiting to be updated, but they are more likely to be handed over to local assembly lines.

At that time, the competition will be about who has the local assembly partners and parts system. Yutong's Peng Pu and Higer's 20-year operation in Algeria were both bets made in advance.

Also included are exchange rates and financing. The car is priced in foreign currency and the fare is collected in local currency. Car companies that can help operators with installment and financial leasing are closer to orders, but also bear the risk of repayment. Research by the Development Bank of Nigeria shows that transportation sector loans account for only about 3% of the country’s private sector credit.

Taken together, the growth rate of China's complete passenger car exports to Africa is likely to slow down significantly in 2027.

However, large markets such as Algeria and Egypt are shifting from complete vehicle imports to local assembly. The decline in export volume and the increase in the share of Chinese brands can occur at the same time.

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