The importation of foreign used cars in Nigeria has declined in the first half of 2022. Reports by the National Bureau of Statistics indicates that with a value of N169.1 billion from January to June, recorded as a 51.2 percent decline from the N346.29 billion recorded in the corresponding period of 2021.
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The data also shows Nigeria’s car imports fell to the lowest levels since the first half of 2018 when Nigerians spent N59.1 billion on used cars. According to NBS, Nigeria spent 96.76 billion on the importation of vehicles in Q2 2022, an increase of 33. 8 percent from Q1 of N72.32 billion.
According to a study by PWC, Nigeria is largely a used car market with a ratio of new to used cars at about 1:134, and an analysis of the age of these cars show that 10 percent are less than three years old, with about 63 percent over 11 years which places Nigeria in the awkward position of being an attractive disposal site for old cars.
Nigeria’s vehicle imports, used cars, have recently been declining as dealers across the country fault the falling value of the local currency, lack of FX, and high cost of clearing at the ports, amongst other factors.
It should be recalled that the Nigeria Customs Service (NCS) removed the controversial National Automated Council (NAC) levy on imported used cars and replaced it with a 15 percent levy.
With the new policy, car dealers bringing in used cars, popularly known as ‘tokunbo’, into the country would be expected to pay 20 percent import duty plus a 15 percent NAC levy, amounting to 35 percent duty.
Olaniran Adelana, secretary of the Lagos state motor dealer association, noted that the high rate of dollars is affecting car dealers, as also the clearing fee which has gone up.
“We are not getting as much dollars as we should, coupled with the increase in dollar rate and the profit from sales has fallen as a result,” Adelana said.
Fred Adebayo, a car dealer lamented about the increase in clearing fees, leading to an increase in price, which has affected sales and has made it difficult to import cars into the country.
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“Toyota Corolla 09/010 which was sold for N600-650,000 at the beginning of the year has also doubled, Toyota Carmy which was sold for N800,000 is now also sold for over 1 million,” Adebayo stated.
Also, Nigerians imported motorcycles and cycles valued at N122.39 billion between January and June 2022, 31.1 percent lower than N177.6 billion in the corresponding period of 2021.
