• Saturday, June 15, 2024
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Foreign manufacturers eye Nigeria’s $153m motorcycle market

MAX donates low-emission motorcycles to Lagos agency

Despite the ban on the use of motorcycles as a means of human transportation in major cities in Nigeria, foreign investors are still able to sniff untapped opportunities in Nigeria’s transport and motorcycle industry.

According to data from the National Bureau of Statistics (NBS), the motorcycles usually imported from India, China, Indonesia, and Japan contributed N416 billion to the total imports in 2020, this is however a 14 percent drop from the N486 billion it contributed in the same period of 2019. The drop may be attributed to the impact of the Coronavirus pandemic.

In 2018, it achieved N204 billion, which represented an increase of 183 percent from the N72 billion realised in 2017; although data for the second quarter of 2017 was not available.

An example of manufacturers looking to tap into this market is Hero MotoCorp, one of the world’s largest manufacturers of motorcycles and scooters, which has made investments to tap from Nigeria’s $153 million two-wheelers industry through its specially made-for-Nigeria motorcycle named Hunter.

The Indian manufacturer recognised an active market in Nigeria which required specific conditions, as the machine offers multiple benefits of modern technology, best mileage, longer engine life, and a comfortable long seat at an attractive introductory price.

The machine also has a metallic bash plate protecting the engine on rough roads, a combi-lock to protect it from theft, and tyre pressure monitoring indicator (accessory) to prevent deflation and puncture while on rugged terrains. Furthermore, it has an industry-first 12-month or 75,000km Engine Warranty.

Beyond the production of machines for Nigerian conditions, the company affirms that it is looking to grow its presence in Nigeria through the establishment of various outlets.

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Anil Sahgal, managing director, Automotive Division, Kewalram Chanrai Group, the exclusive distributor of Hero MotoCorp in Nigeria, says while they focus on satisfying consumers, the company aims to significantly increase its presence in the Nigerian market

“Hero MotoCorp is also planning to have almost forty outlets in twenty towns across Nigeria and will have a pan-country presence through dealers and parts distributors. In addition, an extensive network of over five thousand trained technicians pan-Nigeria will ensure easy access to service and parts for all customers. Powerful Ride, Smart Technology, Unmistakably Stylish,” he states.

In recent years, the importation of motorcycles in Nigeria has been significantly driven by rising urbanisation, growing youth population, and increased businesses and investment.

This also presents an opportunity for more investors to come in as the Nigeria Two-Wheeler Market report by Market Research reveals that the sector has a promising future in the country.

“Nigeria two-wheeler market is projected to surpass $153 million by 2023. Growing demand for two-wheelers in Nigeria has been backed by their higher fuel efficiency and easy manoeuvrability.

“Moreover, their affordability coupled with rising prices of passenger cars are further anticipated to contribute to the growing demand for two-wheelers in Nigeria over the next five years,” the report states

Economic experts believe that the coming of Hero will reduce the country’s unemployment rate, which currently stands at 33 percent and in the same vein boosts economic activities through the inflow of Foreign Direct Investment.

Following the ban on the use of motorcycles as a means of human transportation in Lagos, the most populated and the busiest city in Nigeria, the ingenuity of Nigerians was piqued and this resulted in a boom in the logistics services industry.

With a minimum of N700 and a maximum of N3,000, depending on the location, urgency, and package, people can easily send and receive products in less than 24 hours. The sector has become increasingly competitive with the increase in the number of entrepreneurs, particularly online vendors.

Although motorcycle imports have increased despite the ban, this has simply fuelled activities in the logistics industry. This has also prompted manufacturers of motorcycles like Hero MotoCorp to still see limitless opportunities in the Nigerian market.

GoldStein Market Intelligence in its Nigeria Two-Wheeler Market report reveals that as of 2019 Nigeria held the position of the second biggest market in Africa’s two-wheeler industry; hence it has captured the attention of Chinese and Indian manufacturers

“Nigeria represented the second-biggest offer in the African Two-Wheeler Market in 2019, this was due to insufficient public intra-city transport framework, expanding monetary action and rising interest for last-mile conveyance purpose,” it states

The report also projects that the industry is also expected to grow at a CAGR of 13.31 percent.

Despite the huge demand for motorcycles, Nigeria relies on the importation of Completely Knocked Down (CKD) parts from Asian countries, which are assembled in the country.