Nigerian Cars Market, after the negative start of the year, reported a huge loss in March, as several states imposed restriction measures due to the Coronavirus outbreak. Indeed,car market plummeted 55.7% in March with just 870 units sold, dragging the Q1 down 33.2% at 3.663.
It was just yesterday
Nigerian market – placed 8th worldwide as population and natural resources – was the “gold mine” of the African automotive industry while actually is a market with just few new models sold and a huge bulk of pre-owned imported vehicles
Indeed, until 2014 the market grew steady, eventually hitting the 57.000 units record for new vehicles, when the Government decided to fix two targets for the industry, aiming to boost local production at over half million annual units, creating the hub for the entire region, while support the development of domestic market, projected to grow four times in the following 5 years to hit the 200.000 annual sales in the 2020.
At the end of that year the Nigerian Automotive Industry Development Plan was created matching the Brazilian’s one in which the government rather than “invite” to produce locally, “forced” car-makers to appoint local facilities wishing to be part of the “party”.
In the first two following years, the government released almost 30 licenses, while the domestic market collapsed falling down at 11.743 units (including HCVs and bus) in 2017, due to the deep economic crisis generated by the fall in oil price and the poor domestic demand. So, despite the released licences, no-one started to create local plant, waiting for better times.
In 2018 the market started to recovery, considering the level was near 20% of the 2014 level. Sales grew up at 19.545 (including near 2k of HCVs) and a first group of car manufacturer started to open – in same cases to reopen – small local plant to supply the domestic market. This is the case of Mitsubishi Motors, Peugeot, Nissan, Byd. Volkswagen recently announced the desire to re-opening the local plant closed 40 years ago.
A local Joint-venture, Innosov, started the production with huge difficulties both in terms of financing and production skills. However, they started to deliver the first models in 2018.
In the 2019 the light vehicles market was back in difficulties, following the fast recover shown in the previous year and sales declined 35.3% at 11.300 units, the second worst level in the last decade.
In the first two months of 2020, the market held a negative trend, with Year to Date February sales at 3.643 (-16.5%).
A new Era has arrived
Said this, a new era started in March for the entire World, due to the Coronavirus outbreak, which even worsened the car market trend. Indeed, several states imposed restrictions for social gatherings, as well as school closure, international flights and the closure of non-essential businesses.
As a result, the Nigerian car market plummeted 55.7% in March with just 870 units sold, dragging the Q1 down 33.2% at 3.663.