As ride-hailing services continue to enjoy significant patronage among Nigerians who depend on them for their daily transportation needs, going into the business requires the ‘perfect car.’
As the chemistry between two lovers, drivers of ride-hailing services like Bolt, formerly Taxify, are showing a growing interest in Toyota vehicles, especially the Corolla, and Camry models, due to certain features they possess, BusinessDay has observed.
What can be described as almost a ‘love affair’ between humans and a machine, or a bond of some sort, is merely founded on durability.
A Bolt driver, named Kelvin, switched from using the Matrix model to Corolla after the engine became faulty, and has since discovered that the car is best for the transportation business in Nigeria.
He and many of his colleagues use the model because of its low consumption of fuel. He said that spare parts for the car are readily available in Nigeria at cheap prices, adding that replacing a damaged part is not expensive.
“It’s better than other products,” he said. “It’s preferable for the transport business. The car is very strong. You know our roads are bad in this country.”
While Matrix is also good partly because it is built with the same engine as Corolla, their body parts are different. Kelvin further told BusinessDay that he now spends less on fuel, although, this depends on the hours he spends working daily.
BusinessDay also observed that out of 10 rides, eight of the drivers are likely to use either a Corolla or Camry. The products are now being described as ‘Uber Car’ due to the popularity of these vehicles among divers of these professional cab services.
The Corolla story
The popularity of the brand may be connected to its strong dependence on distribution. Since Toyota was established around 80 years ago, over 230 million vehicles have been sold. Within that number, approximately 44.1 million units of the Corolla have been sold.
The company also has a significant global presence and produces the model in 13 countries/regions. It has also localised Corolla production with its 16 plants across the countries/region.
Africa accounts for only 2 percent of the company’s global sales in 2015 which stood at 1.34 million, with South Africa being the only African country where Toyota plants exist. Also, a total of 181, 000 Corollas have been sold across the African region from 2011 to 2016.
The Toyota brand made a debut in the Nigerian automobile market in 1965. It took the company 11 years to grow the number of Toyota distributors to five.
In another 10 years, (in the 80s) Toyota Motor Corporation, Japan (TMC) appointed two additional distributors due to poor performance by some of the previously appointed distributors.
This happened at a time Nigeria’s economic crisis forced the government to adopt the Structural Adjustment Program (SAP) to stabilize the system, leading to major changes in the business environment which affected the automobile industry.
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Only four distributors, including Elizade Nigeria Limited, became the only surviving distributors for the company by 1995. The corporation then decided to consolidate its operations by appointing Toyota (Nigeria) Limited as its sole distributor in Nigeria.
It said the decision was for the ease of business processes and efficiency. Today, with no plant in Nigeria, Toyota products have grown to becoming the fastest selling products in Nigeria, particularly the Corolla and Camry models.
CEIC Data says Nigeria sold about 9, 800 cars in 2019. In 2020, the sales dropped to 7,700, representing a decline of 21.43 percent. But brand-wise, Toyota remains on the top of the leaderboard and reports a 15.3 percent increase in sales Year-to-Date while holding a 17.9 percent market share.
Imports of second-hand vehicles and the lack of reliable data make the exact size of Nigeria’s vehicle market difficult to quantify. But despite laudable intentions by the authorities to develop the sector, it is still highly dependent on imports to meet local demand due to insufficient domestic vehicle production.
An instance would be passenger vehicles making up the largest export item from the United States to Nigeria in 2018, according to the U.S. Census Bureau, with Japanese products dominating both the new and used vehicle market, and controlling almost one-third of it due to customer perception of their reliability.
BusinessDay gathered from multiple sources that the majority of cars imported from the United States into Nigeria are Japanese brands with Toyota at the top of the chart.
Shopping considerations in the used car market
In the Nigerian used car market, fuel efficiency is seen as a major selling point. Nigerian car users constantly worry about the dilapidated road infrastructure, hence, vehicles that are deemed as durable and comfortable are quite desirable.
As a result, Japanese brands have become incredibly popular, with Toyota leading the way in terms of popularity.
The major factor driving this popularity is the fact spare parts for Toyotas are readily available in most places, leading to repair costs that are not prohibitively expensive.
According Auto Auction Mall, the availability of spare parts is what determines the least popular brands in Nigeria. Brands like Volkswagen automobiles are particularly undesirable, due both to the scarcity of spare parts and also to the expense of those parts.
Mechanics everywhere
Emeka Nnaji, a car dealer, said aside from the fact that Corollas are durable and strong, and the parts accessible anywhere within and outside Lagos; drivers are attracted to it because of its 1.8 litre engine which saves fuel.
More importantly, almost any auto mechanic can fix a Corolla car.
“There are mechanics are everywhere for it,” he said. “You will see a Toyota mechanic anywhere you are, even if you’re stranded on the road, you’ll see someone who can work on a Toyota car.”
According to Nnaji the brand hardly develops problems or gear issues as they come with very strong gears and engines. He described the vehicles as one of the fastest-selling cars or even the fastest-selling cars in Nigeria, noting that is it also very popular among Nigerians generally and not just taxi drivers.
A scramble for Corollas at the auctions
The popularity of Toyota has created an opportunity for dealers who scramble for the cars at the auctions abroad. Another car dealer told BusinessDay that the brand is very competitive at the auctions.
“Everyone (dealers) wants to buy a car that will sell immediately. The Corolla falls into the category,” Abdullai Abdulsalam said.
Nnaji, further speaking on demand, observed that an average Nigerian who wants to buy his first car or who just has money to buy a car, would rather go for a Corolla than any other car because of the features stated above.
However, the high demand for the car has also shot up the prices at car auction platforms as a lot of Nigerian car dealers are bidding for them.
“The price of the car has gone up, even as a Nigerian used. So, a lot of car dealers in Nigeria are bidding for these cars. So, it drives up the price at the auction, and when it comes down to Nigeria, after paying your import duty, and others, plus the profit you want to make from it, the price just goes so high,” he explains.
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