• Friday, June 21, 2024
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BusinessDay

Auto financing can add N2.8bn to Nigerian economy – Etop Ikpe

Autochek partners with AutoFast to facilitate vehicle maintenance

If 1000 vehicles were financed at a cost of N4 million each, the total sales would be N4 billion, according to Etop Ikpe, CEO of Autochek, who spoke at the Autochek summit 2022 in Lagos, which was themed, “Creating Economic and Human Capital Opportunities through Auto financing.”

According to data obtained exclusively by BusinessDay from the Lagos State Motor Vehicle Administration Agency, 319,550 new car registrations were completed in Lagos in 2020, up 5.8percent from 300,903 in 2019.

Furthermore, the Autochek director added that the major issue is that everyone who buys those vehicles pays in cash. However, with financing at most say 30percent equity contribution, that means that N2.8bn can be recirculated in the economy.

Those 1000 automobiles are also subjected to corporate vehicle registration. “When a car is financed, it must also go through the proper vehicle registration, documentation, and thorough insurance,” Ikpe noted.

Read also: Improved access to finance will boost the automotive sector’s growth – Autochek

Car registrations had climbed every year since 196,257 in 2016, and the trend did not reverse in 2020, a year when many people had to pay extra attention to their finances, according to the data.

These 1000 vehicles would be required to have four services every year, at a cost of N20,000 on average. That amounts to roughly N80 million for the aftersales sector.

“That is really how you construct a system that ensures that everyone in the value chain gets value and provides a service, with residual effects across boards” Ikpe said.

The strategic role of Autochek in the African automotive sector is to de-risk the overall process of car ownership, reorganise the ecosystem through new value creation and technology, and eventually improve productivity.

Autochek is transforming the African automotive market by combining the ease and selection of an auto e-commerce platform with the extra flexibility of financing.