Government Policies, Rising Inflation Put Price of Tokunbo Cars Out of Reach of Nigerians
- A recent survey has shown that the value of imported used cars in Nigeria has spiked in recent years
- Experts have blamed rising inflation and government policies for the high cost of imported vehicles
- Recently, the prices of vehicles have gone up compared to about nine years ago
Rising inflation and various policies of the Nigerian government are affecting the cost of new and used imported cars and putting them out of the reach of Nigerians.
Increasing inflation and shrinking living standards affect purchasing power, making it impossible for middle-class Nigerians to afford used vehicles.
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Value of imported cars drops
The National Bureau of Statistics puts Nigeria’s inflation at 22.04%, adversely affecting wage growth.
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According to BusinessDay, a brand new Kia Cerato 1.6-lite automatic transmission car sold for N3.96 million in 2015 now sells for N23.4 million, while a Kia Picanto 1-litre engine capacity sold for N2.25 million in 2014 is now selling for N14.76 million.
Dealers and buyers have decried various headwinds impacting the value and cost of vehicles in Nigeria.
According to data from NBS, the value of imported vehicles into Nigeria declined by 47% in 2022 to N325.05 billion from N617.48 billion in 2021.
A report by PricewaterhouseCoopers (PwC) said 63% of Nigerian households could not afford cars without some support, putting the total number of vehicles on Nigerian roads at 14 million. In comparison, used cars make up 70% of the vehicles sold in Nigeria.
PwC discloses top sources of cars imported into Nigeria
The company listed the US, UK, and Germany as the major import routes.
In 2013, the Nigerian government established the National Automotive Industry Development Plan to attract foreign direct investment and curtail dependence on imported vehicles, promoting local production.
Under the policy, about 35 companies received licenses to assemble vehicles in Nigeria, while the Nigerian government increased tariffs on new and used cars by 70%.
FG releases new details as value of Tokunbo cars in Nigeria falls by 47% in 2022
Legit.ng reported that according to the National Bureau of Statistics (NBS), the value of used vehicles dropped by 47% in 2022, to N335.05 billion from N617.48 billion in 2021.
The NBS data says that used cars with diesel or semi-diesel engines cost around N72.32 billion to import in Q1 of 2022, N96.76 billion in Q2, about N90.77 billion in Q3 and N65.19 billion in Q4 of 2022, computing about N325.05 billion.
Compared to 2021, vehicle dealers brought in N174.22 billion worth of used vehicles in Q1, N172.07 billion in Q2 of 2021, N185.41 billion in Q3 of 2021, and N85.77 billion in the fourth quarter of 2021, amounting to N617.84 billion.
Source: Legit.ng
