Soaring duties, FX rates cripple Nigeria’s used-vehicle market

•As dealers lament sales slump

By Glory Bassey

Car dealers in Nigeria have lamented a sharp decline in vehicle sales, blaming soaring import duties, high exchange rate and rising cost of living as reasons why car ownership is increasingly becoming unaffordable for many Nigerians.

A car dealer and importer, Mr Paul Uche, said the auto market segment has experienced a significant change in prices and customer patronage, with most vehicles now selling over five times higher than the prices three years ago.

Uche said that a 2005 Toyota Corolla that previously sold for about N1.5 million now costs between N8 million and N8.5 million, depending on its condition and grade. Similarly, a Toyota Camry 2010 model that sold for between N2.2 million and N3 million now goes for N9 million to N10 million.

He said the situation had worsened this year, with sales dropping considerably compared with previous years, adding: “you can even stay three to four months without making any sales; the situation is frustrating for people struggling to keep their businesses afloat. The impact is also evident in the market for locally used vehicles.”

The dealer explained that a Nigerian-used 2005 Toyota Corolla, which previously sold for between N750, 000 and N850, 000, now costs between N4.3 million and N4.5 million, further limiting the number of prospective buyers able to afford a car. Identifying the exchange rate as one of the major factors driving the price increases, the dealer said the cost of importing vehicles has risen alongside customs duties and other clearing expenses.

He recalled that clearing a Corolla previously cost between N200,000 and N350,000, but now requires between N2.5 million and N3.5 million.

While saying that rising cost of clearing imported vehicles has placed additional pressure on dealers and customers, he pleaded with the government to review the situation, warning that the combination of high import costs and weak purchasing power was hurting the business.

He also linked the decline in patronage to the rising cost of living, noting that higher rents, food prices and other household expenses had left many Nigerians struggling to meet basic needs. “You wouldn’t expect somebody who is struggling to survive to look at buying a car”.

The post Soaring duties, FX rates cripple Nigeria’s used-vehicle market appeared first on Vanguard News.