Cars going out-of-reach for working-class Nigerians

…Development mirrors economy in distress

…Older citizens relive experience in good old days

At a recent corporate training session, most of the trainees were shocked when a facilitator proudly said that he bought his brand new Volkswagen Beetle car about N3000 in the late 70s, amid an option of a Peugeot, which was a little above the Beetle in price.

Also, to their amazement, the trainer mentioned how new cars were part of the work incentives given to fresh graduate recruits by companies then.

“Those were good old days,” the trainer enthused.

Truly, considering the realities of our time, the days where many people can easily buy brand new cars from their legitimate earnings are gone.

Sadly, the days of imported fairly-used cars, which many, who cannot afford new cars resorted to in the recent past, are also gone.

Now is the era of Nigerian-used cars as auto markets shift to market-focused outfits, streets and mechanic workshops, where potential buyers can easily negotiate without being embarrassed for offering too low prices.

Top among some of the Nigerian-used car outfits include; Car45, Automania, CarsToday, among others, which now offer people opportunity to own cars, though used in Nigeria and quality in doubt.

They were businesses created to take advantage of the devalued Naira, high exchange rate and economic hardship to offer opportunities to potential car buyers and the unemployed as well.

So, from these outfits, streets, mechanic workshops, estate entrances, worship places, homes and other unlikely places, Nigerian-used cars are obvious with bottled water on the roof of the car, to signal ‘for sale’, instead of the usual written notice.

But the most worrisome of the trend is that the cars, mostly second-hand and even third-hand are often not in good order, due to the bad roads, lack of routine maintenance, yet they are expensive.

According to BDSUNDAY’s survey, a Nigerian-used Toyota RAV4 2003 model, which has three to four newer models after it, goes from N4million, while the second-hand version, popularly called Tokunbo, is from N7million.

At Ilupeju in Lagos, a Nigerian-used cars dealer sells the 2010 model of Toyota RAV4, which follows the 2003 model, from N6,615,000 to N18 million, depending on condition, mileage, and location.

On Jiji and Autodeck listings, the 2022 model of fairly-used Toyota RAV4, which the newest model, goes from N30 million, depending on the trim level, condition, and mileage.

The fairly-used and Nigerian-used versions of other car brands are equally very expensive.
In Abuja, Nuhu Ismaila, an auto dealer, noted that he was surviving on Nigerian-used cars as the high cost of fairly-used ones is forcing many out of business.

“We bring Tokunbo cars from Lagos. Our contacts who deal with the importers are selling to us according to the market rate and we cannot buy at that rate and sell off like before.

“So, we go for what is in demand now, which is Nigerian-used cars. They are cheaper for many people, who cannot afford the fairly-used options, but the buyers are aware of the car conditions,” Ismaila explained.

Emeka Nwokoye, another dealer in Abuja, noted that the Nigerian-used car business is growing on the backdrop of the economic hardship, though the profit margin is not like the fairly-used cars.

“I don’t need to pay the government for space to display the cars again. All I do is to get the contact of the owner, take a willing buy to see the car and get my commission when the business is done.

The civil servants are my major customers, they keep selling off their old ones and buying newer version, but all Nigerian-used.

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“I also buy cars auctioned by some government agencies here in Abuja. We repair and sell as Nigerian-used because government drivers are usually rough with cars,” he said.

In the same vein, Marcel Gemade, a lawyer, thinks that the Nigerian-used car market will continue to boom as long as the economy is not getting better.

“I am a lawyer, I work with the government and still do private practice here and there. But I still struggle to maintain my fairly-used car because I will need about N17 million to get that same SUV, which I bought N4 million seven years ago. Where is the money? So, Nigerian-used cars are the options many who are weighed down by the present economic crunch have,” the Benue-born lawyer said.

Johnson Eremuye, an auto dealer at the Berger Auto Market in Lagos, blamed the high cost cars, both fairly-used and Nigerian-used, on the increment of tariff on imported fairly-used cars by the Federal Government and its inability to stabilise the foreign exchange rate.

Eremuye, a Biology graduate-turned businessman, who is popularly called ‘Erecash’, decried the situation, thus: “Currently, there is a 20-percent import duty and 15 percent levies for used and new cars.

In all, we pay 35 percent duties for a car, depending on the model and year of manufacture.

“So, how do you expect the importers and we that buy from them to stay in business if not to pass on the cost to individual buyers. That is why people are looking for cheaper cars and the Nigerian-used market is booming seriously here in Lagos.”

With the above, he noted that the price of Tokunbo cars has tripled and obviously out of the reach of many.

Apart from the import duties, Eremuye lamented that the sad development is worsened by the very high and yet fluctuating foreign exchange that has also made some auto dealers who have investable money to slow down on importation from popular auto markets in Europe and the US where fairly-used and accidented cars are auctioned.

“Dollar is over N1600 and still rising. The instability in foreign exchange is our biggest challenge because you can lose money easily if you are not following the rates. Yes, if you import at very high rates, the selling price will be high too, probably too high to scare potential customers until the rates increase above what they were when you bought the cars. The auto business is riskier now and many of our colleagues are diverting to grocery and real estate,” he disclosed.

Considering the increasing risk, Izuchukwu Ezeokoli, managing director, Izzy Cars International, opened a bar and lounge business in 2022, while doubtful that things will improve soon.

“At over N1600 for $1, you can barely fill a 40ft containers with cars. So, those who want to take risk are doing so, but passing on the cost to the buyers. This will continue and prices will keep going up because dollar is still high, tariff is increasing, landing cost, port and custom charges, among new taxes will not allow prices of cars to come down.

So, in the interim, Nigerian-used cars are the options for those who must drive cars in this present economy,” he said.

Offering solutions, Olushola Adenuba, an economist, urged the government to ensure favourable auto policies that would encourage automobile assembly plants and indigenous car manufacturers to stay in business.

“Like many people say, we have Innoson Motors that is even exporting cars to other countries, but it is only governments that are buying them here. The average potential car buyer cannot afford them.

“The government and corporate organisations can partner banks, like in the past, to offer easy car purchase models. We can, if we are sincere as a government and people,” he said.

Some observers have however, said that the bloated population may have made it difficult for many Nigerians to be at the bottom ladder.

Grace Ajayi, an accountant by training, recalled that the days when employers wooed employees with cars were when there were few graduates and to fill many openings.

“In those days, graduates were few and there were many openings. So, to woo the fresh graduates, cars were attached as perks. Today, we have thousands of graduates qualified for one position. So, employers are not giving out cars because the openings have become highly competitive,” Ajayi said.

Andrew Orakwe, a pharmacist, said that the failure of successive governments and administrations in the country to grow the economy should be blamed rather than the population.

“Every forward-looking government plans for its country’s tomorrow. Things never remain static. The Nigerian economy has continued to remain stunted. It is that failure that has resulted in the “japa” syndrome we are contending with today. If for instance, a young man gets into marriage without first planning how to take care of the future of his family, if tomorrow he has five children and cannot send any of them to school because they are five, is he excusable? That is exactly what is happening to Nigeria.

We should not be talking about good old days; it should be good today and tomorrow. Our yesterday must not be better than out today and tomorrow,” Orakwe said.