A new report by PWC suggest that there are a total of 14 million cars currently plying Nigerian roads. The report titled The report titled Africa’s Next Automotive Hub took an in-depth look at the Nigerian automotive industry from the 1960s to date.
Here are some highlights of the report;
- Market Characteristics Nigeria is largely a used car market with a ratio of new to used cars at about 1:134. PwC estimated that In 2014, cars were 410,000 imported into the country, about 74% were used cars.
- An analysis of the age of these cars show that 10% are less than three years old with about 63% over 11 years which places Nigeria in the unenviable position of being an attractive disposal site for old cars. Tokunbo cars make up about 70% of used cars sold in Nigeria.
- Toyota and Honda dominate the used car market as they satisfy the criteria of price, durability and resale value. Hyundai and Kia are not popular brands in the used market segment because of very low demand for them given a general perception that they lack second-hand value. In terms of models, the most popular used cars are listed below.
- Individuals are the main drivers of Nigeria’s used car market, purchasing ~80-90% of all used cars. A few small corporates and companies using vehicles for commercial purposes e.g. transport, may purchase used cars but only account for 10-20% of the market as companies usually prefer to buy new cars.
- Among the most popular models of used cars, the Honda Accord (2004-2006) is popular among first time car owners and young professionals most of whom are in the middle income class. Also popular among this group is the Toyota RAV4 (2002) and the Toyota Corrolla (2003-2006). The Toyota Camry (1999-2001) is mostly used for private and fleet cab business by low income earners who also have a remarkable liking for the Volkswagen Golf (1999-2005). The mass affluent are more likely to go for the Honda Accord (2007-2012) as an alternative to buying a new executive car. The Toyota Camry (2007-2012) is also popular among this class for the same reason.
- Andrew S. Nevin, a Partner with PwC Nigeria and Co-Author of the automotive report said during the presentation of the report that industry experts believe that Nigeria’s potential annual new-car market could be as high as One million. It currently sits at about 56,000 in a used vehicle dominated market. The National Automotive Design and Development Council (NADDC) estimates annual imports at about 400,000 vehicles (100,000 new and 300,000 used), valued at about US$3.45bn.
- He stated that Local production capacity stands at 100,000, noting that utilisation has over the years dropped to less than 15 per cent. The NADDC believes the automotive industry, which currently employs around 2,600 workers, has the potential to generate 70,000 direct jobs and 210,000 indirect ones.
Get the report here
