More credit needed to drive growth in Nigeria’s automobile ecosystem

Availability of credit and autofinancing options are imperative to drive growth in Nigeria’s automobile ecosystem, Etop Ikpe, chief executive officer, Autochek Africa has said, “Nigerians don’t love tokunbo cars but can only afford tokunbo cars. Hence the importance to avail credit and autofinancing options.” Ikpe said in his speech themed ‘Multimodal Effect of the Automotive Sector in Economic Development’ at BusinessDay’s CEO Forum Event.

Speaking on the automobile value chain, Ikpe emphasised that the automobile value chain encompasses various aspects beyond manufacturing, which has the lowest employment rate.

Sales, repair and maintenance, along with valuation and pricing, play an equally important role in the automobile ecosystem. Similarly, logistics and storage of vehicles, as well as the insurance sector’s warranty development and vehicle grading and certification, are essential for delivering value and credit serves as a connecting force, integrating all these components together.

“Cars are fundamentally highly-priced considering the purchasing power of Nigeria but we don’t have a vibrant credit or autofinancing structure to finance automobile purchases; whereas the availability of credit for purchase is what buoys developed economies’ car sales growth,” Ikpe said.

“A thriving mobility sector is crucial to support industrialization. For example, when 100 cars are sold and financed, their registration generates revenue for the government. As sales increase, the insurance sector benefits, providing revenue for the repair and maintenance industry,” he continued. “The increased sales also result in higher income for manufacturers, enabling them to produce higher-quality cars. This interconnected cycle demonstrates the importance of a robust mobility sector in driving economic growth and supporting various industries.”