BrandArena: 63% of Nigerians Can’t Afford to Own a Car Without Financial Support - Report

Monday 25 January 2016

63% of Nigerians Can’t Afford to Own a Car Without Financial Support - Report

How will the present state of economy affect sales of locally manufactured cars locally and in the international market is a question on the minds of expert analysts. In December 2015, Carmudi Nigeria predicted that Nigeria may contribute about 4.5 percent to global automobile sales as a result of increased investments in 2015.

Proper implementation and support of the national automotive policy were also mentioned as criteria to meet this target. The present state of Nigeria’s economy may affect not only production but supply and sales of locally manufactured automobiles within and outside the country; it may also affect Nigeria’s contribution to global automobile sales.

A report by Agility Africa named Nigeria among the ‘Adjudged Most Promising Markets’ in Africa but the continuing drop in oil price and the instability and continued depreciation of the naira in the international market have greatly affected Nigeria putting the economy in quagmire.

It is unsettling to discover that Nigeria may not be able to contribute anything meaningful to the global economy in 2016. The just developing automobile industry in Nigeria may be part of the first sector to become affected by the downturn Nigeria is currently experiencing. Presently Nigeria has 35 automobile assembling plants approved by the NAC for manufacturing and assembling of automobile including heavy duty and security vehicles. Unfortunately less than half of the total number is operational.

Industry experts believe that Nigeria's potential annual new-car market could be as high as One million as a result of large consumer base including individuals, corporate and government organizations. With the present increase in exchange rates, high interest rates, low disposable income, increasing unemployment rate and inflation the value may drop below 30%.

In order for Nigeria to fully accomplish its potential of becoming Africa’s automotive hub, key areas such as car financing should be made accessible. Cubing vehicle smuggling, protecting drivers by ensuring vehicle safety standards are maintained should be top priority as well as supporting local assemblies and building human capital.

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