Soaring duties, FX rates cripple Nigeria’s used-vehicle market
Nigerian Car Dealers Report Sharp Decline in Vehicle Sales Amid Rising Costs
By Glory Bassey
Car dealers in Nigeria are reporting a significant decline in vehicle sales, attributing the downturn to soaring import duties, a high exchange rate, and an increased cost of living, which have rendered car ownership increasingly unaffordable for many citizens.
Mr. Paul Uche, a car dealer and importer, highlighted the drastic changes in the automotive market, noting that prices have surged dramatically, with many vehicles now selling for more than five times their prices from three years ago. For instance, a 2005 Toyota Corolla that previously sold for approximately 1.5 million naira is now priced between 8 million and 8.5 million naira, depending on its condition. Similarly, the price of a 2010 Toyota Camry has climbed from a range of 2.2 million to 3 million naira to between 9 million and 10 million naira.
Uche also pointed out that the sales situation has worsened in 2023, with transactions declining compared to previous years. “You can even go three to four months without making any sales; the situation is frustrating for those trying to keep their businesses afloat. The impact is also evident in the market for locally used vehicles,” he stated.
He explained that the price of a Nigerian-used 2005 Toyota Corolla has increased from approximately 750,000 to 850,000 naira to a current range of 4.3 million to 4.5 million naira, further limiting the number of potential buyers. Uche identified the exchange rate as a major driver of these price increases, noting that the cost of importing vehicles has surged alongside customs duties and other clearance expenses.
Previously, clearing a Corolla would cost between 200,000 and 350,000 naira, but that cost now ranges from 2.5 million to 3.5 million naira.
The rising costs associated with importing vehicles have placed additional pressure on both dealers and customers. Uche urged the government to address the situation, warning that the combination of high import costs and decreasing purchasing power is detrimental to the business sector.
He also linked the declining patronage to the broader economic challenges facing consumers, highlighting that increased rents, food prices, and household expenses have left many Nigerians struggling to meet basic needs. “You wouldn’t expect someone who is struggling to survive to consider buying a car,” he added.
