Nigerians are giving up hope of buying brand new vehicles as the total number of new vehicle sold in Nigeria will not exceed 10,000 units by the end of this year, car dealers of have told BusinessDay. Rising unemployment, sharp rise in car prices due to a weaker naira have all combined to ensure most Nigerians and even corporates can no longer afford to luxury of buying a brand new car.
In 2013, at the height of Nigeria economic boom, the number of new vehicles sold in the country topped 50,000 figures from car operators show. This largely inspired the introduction of a new automotive policy in 2013 that sought to encourage the local assemblage of cars but that policy has not had the expected impact as a biting economic recession has almost severely weakened the purchasing power of Nigerians and consequently appetite for new cars.
While speaking to the media on Tuesday, local automakers and dealers in Lagos blamed low purchasing power due to economic crunch, scarcity of foreign exchange and high interest rate as some of the factors responsible for the drastic drop in new car sales in the country.
They spoke at the 2017 symposium of the automobile and allied services group of the Lagos Chamber of Commerce and Industry held under the theme, ‘The Nigeria auto policy: The current drivers’.
Executive Director, Truck masters Nigeria Limited, Oseme Oigiagbe, said rather than encourage production and purchase of new vehicle sales, the enforcement of the auto policy had largely led to significant reduction in sales.
He disclosed that new car sale figures have consistently dropped from 50,000 units in 2013 to 40,000 units in 2015; 20,000 in 2016 and 10,000 this year.
Oigiagbe lamented the high interest rate on vehicle loans, ranging from 25 per cent to 27 per cent.
On his part, Executive Director, Kewalram Chanrai Group, Anil Sahgal, also put the total figures of new vehicles sold this year at 10,000 units, stressing that without the support of the government for the automobile assemblers, the industry would not make any headway.
The Executive Director, Nigerian Automotive Manufacturers Association, Remi Olaofe, said many of the auto assemblers were merely producing vehicles and dumping them in the warehouses as a result of low patronage.
Managing Director, VON Automobile Limited Adetokunbo Aromolaran, who described the situation as pitiable, said there was no way the nation could make progress if the government continued to buy imported fully built vehicles.
He said, “The government remains the biggest buyer, and it has to lead by example by buying made-in-Nigeria vehicles. The auto business is demand-driven; once volume grows, the cost of production will drop and vehicles’ prices will come down. There is also the need to create viable vehicle finance scheme.”
The Managing Director, National Trucks Manufacturers Limited Ibrahim, Bayero, said, “Majority of us have been recording losses in the last five years due to poor sales.”
He criticised the granting of licences by the government to 53 auto firms to assemble vehicles in Nigeria, saying, “It does not make economic sense’ and warned that without sincerity, the auto policy would not achieve its desired goals.”
While the Deputy President, LCCI, Babatunde Ruwase, urged major players in the industry to be more proactive if they hoped to make appreciable impact in the implementation of the auto policy.
MIKE OCHONMA
