Nigeria 2018. Market started to recover in a uncertain environment

Nigerian Cars Market

Nigerian Cars Market in the 2018 approached a recovery after to have collapsed from 57k to 11k in the previous three years. Supported by middle and upper class demand, new vehicles sales grew up at 17.529 units (+71.3%). Toyota is market leader with a total vehicles market share above 23%.

Economic Environment

Nigerian economy remained relatively weak in the final quarter of 2018, following a modest showing in Q3 which was propped up by higher oil production. The PMI edged down in December and brought the Q4 average below that of Q3’s, signaling waning momentum of business activity towards the end of the year.

On the demand side, multi-year high unemployment in Q3 coupled with still-elevated inflationary pressures through year-end likely weighed on private consumption in Q4.

The economy is expected to gain traction this year, on the back of stronger household consumption and public spending. The recent slide in oil prices and announced OPEC oil output cuts pose downside risks going forward, however. Political uncertainty over the outcome of next month’s general election also clouds the outlook.

Market Trend

Nigerian market was considered the “gold mine” of the African automotive industry considering the country is the 8th worldwide as population and rich of natural resources.

The market steady growing until the 2014 when reached the record of 57.000 units of new vehicles, while at those time the import of used vehicles was estimated near 0.4 million units per year.

The circulating park was already over 5 million units, but very old, obsolete, polluting and without a real value, a part for traders of used spare parts.

Following studies of primary global consulting firm, the Government decide to fix two targets. The first was to boost the new vehicles industry at near 0.2 million units by the 2020  and the second was to do it while creating a local national automotive cluster, inviting global top producers to open plant locally utilizing the country also as hub for the surrounding region.

At the end of the year the Nigerian Automotive Industry Development Plan, was generated, basically copying and paste (a pure ability of primary consultants) the plan developed few years before by the Brazilian government and rather to “invite” to produce locally, they “forced” everyone wishing to sell in the country to produce there.

While in the first two following years the government was glad to release near 30 licenses to assembly local vehicles locally, the fall of oil price in the international market and the poor base of domestic demand created a huge fall in the market which collapsed at 11.743 units (including HCVs and bus) at the end of 2017, with all those licence remaining closed in the Minister’s drawers.

In the 2018, having bottomed down, the market has shown signs of recovery, mainly for a survival demand and the delayed on renovating the vehicles park for the middle/upper classes, and the sales grew up in the entire year ending with a robust recovery of 71.3% at 17.529 units (still very far from the record and from any dreamed target).

In the productive side something is moving. The local venture, Innosov, started to deliver few hundred thousand units, but the funds available are uncertain and the destiny looks signed and not positive.

Other local manufacturers opened or restored after years are owned by Mitsubishi Motors, Peugeot, Nissan, Byd. But we did not find sales figures which confirm that production is effective. Volkswagen recently announced to plan the re-opening of the local plant, closed 40 years ago.

AS far as the competitive arena, in the 2018 market leader was Toyota, selling 3.931 vehicles (+57.4%) with 23% of market share. In second place Ford with 1.809 units (+74.3%) followed by Hyundai with 1.601 (+44.1%).

Tables with sales figures

In the tables below we report sales for Top Brands

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