Nigeria 2023. Car Market Increased (+18.9%) While Standing At Marginal Volumes

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The 2024 Toyota Sequoia TRD Pro
The 2024 Toyota Sequoia TRD Pro

Nigerian Cars Market in 2023 grew up for the 3th year in a string. Total sales reached 13,304 (+18.9%) the best out of the last four years, while very far from market potential and projections.

Market Trend and Outlook

Nigeria is a multi-ethnic and culturally diverse federation of 36 autonomous states and the Federal Capital Territory. The political landscape is partly dominated by the ruling All Progressives Congress party (APC) which controls the executive arm of government and holds majority seats at both the Senate and House of Representatives in parliament, and majority of the States.

Weakened economic fundamentals led the country’s persistent inflation to reach a 17-year high of 25.8% in August 2023, which, in combination with sluggish growth, is leaving millions of Nigerians in poverty.

Following a change in administration in May 2023, the country is now at a crossroads, and has a unique opportunity to return to a sustainable and inclusive growth path. Recognizing the need to change course, the new administration has undertaken key reforms to restore macroeconomic stability by removing the gasoline subsidy and unifying and significantly liberalizing the exchange rate. These reforms, together with global oil prices remaining above their historical averages, are expected to begin to reduce fiscal pressures, and unwind the critical macroeconomic distortions that held back growth in the past.

The automotive industry is expected to grow at hundred thousand units, while i reality is is steady just over the 10k since years.

And indeed, in 2023 the new vehicles market grew totalling 13,304 sales, while being up 18.9%. December caps off the year with a 25.0% growth, registering 1,149 new sales.  

Looking at cumulative data up to December 2023 brand-wise, the leader Toyota reports a 15.5% increase in sales while holding 16.1% market share, followed by Innoson which grew 2 spots in the rankings. Closing the top 3 is Hyundai with a 28.3% YTD increase. 

Medium-Term Market Trend

Until 2014 the market grew steady, eventually hitting the 57,000 units record for new vehicles. 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 to 11,743 units in 2017, due to the deep economic crisis generated by the fall in oil price and the poor domestic demand.

In 2018 the market started to recover, considering the level was near 20% of the 2014 level. Sales grew up at 19,545 and the first group of car manufacturers started to open small local plants to supply the domestic market. In 2019 the light vehicles market was back in difficulties, following the fast recovery shown in the previous year and sales declined 40.3% at 11,663 units, the second-worst level in the last decade.

The Nigerian new light vehicles market seems unable to recover after the series of negative facts which impacted severely the market in the last years. In 2020, the modest growth of the economy was killed by the combined effects of strict social distancing measures and widespread travel restrictions due to covid19 and the fall of oil prices in the international market.

Since 2021 the market is growing, however remaining at negligible level for the country most populated of the African continent.