Nigeria’s automobile sector faces a deepening crisis with vehicle prices jumping 126% in eight years.
A mid-size SUV that cost N18 million now sells for N80 million, pricing out middle-class buyers and devastating sales. Dealers report the industry is collapsing under these pressures.
Kunle Jaiyesimi, president of AAABTEAEN, revealed how drastically the market has shrunk. “Eight years ago, N18 million bought a good SUV,” he said. “Today, that same vehicle costs N80 million without affordable financing options to help buyers.” The situation has left dealerships struggling to survive.
Previously, major dealers sold 120-150 vehicles monthly, but 2022 saw just 18,000 new units nationwide. Government purchases accounted for most sales, exposing weak consumer demand. Jaiyesimi blamed failed auto policies for worsening the crisis by lacking proper incentives.
Meanwhile, government engagement remains poor, as shown by officials skipping the recent West Africa Automotive Show. “Foreign investors organized this event,” Jaiyesimi noted. “Key ministers’ absence discourages investment in our sector.” This neglect hampers growth opportunities.
Compared to Ghana’s thriving auto sector with seven manufacturers, Nigeria lags significantly. Jaiyesimi criticized officials for excluding local stakeholders when negotiating with global brands like Toyota. Such exclusion undermines domestic industry development.
Consumer financing presents another major hurdle. Stakeholders proposed a 35% import levy to fund credit schemes, potentially generating N200 billion since 2014. While President Tinubu’s new N20 billion vehicle credit scheme helps, much more support is needed.
Spare parts availability also concerns dealers as Nigeria transitions to gas vehicles. Ngozi Emechebe of ASPMDA stressed that gas must be accessible for conversions to succeed. “Without available gas, how will people adapt?” he questioned.
Emechebe recalled when 50% of vehicle parts were locally made in the 1990s. Now, Nigeria imports nearly everything. He urged manufacturers like Innoson to improve parts accessibility to revive local production capacity.
Automobile dealers now demand comprehensive reforms, including expanded credit schemes and stronger policies. They warn that without government action, the sector’s decline will accelerate. “Support must reach both businesses and consumers,” Jaiyesimi emphasized.
With prices still rising and local production struggling, stakeholders insist urgent measures are needed. Nigeria’s auto industry risks further deterioration unless policies change and investments grow. The time for action is now before complete collapse occurs.
Dealers remain hopeful but stressed. They need government partnership to rebuild an industry crucial for transportation and employment. Without cooperation, recovery seems distant for Nigeria’s automotive sector. The coming months will prove decisive for its future survival.