Nigeria Tops List of Most Expensive Country to Purchase New and Used Cars in West Africa. Cars may no longer be affordable for middle class citizens in Nigeria!
Two years after the automotive policy took effect; the local automobile manufacturing sector is yet to impact the economy. According to government statics the Nigeria auto market is worth more than 6 billion naira. In August 2015 Nigeria gained momentum with the approval of 12 more local automobile manufacturing plants bringing the total of local automobile manufacturers operating in Nigeria to 45. The plants are expected to assemble utility vehicles, passenger cars, pickup vans, buses, tricycles and motorcycles, among others. But even with the availability of locally made brand new cars, implementation of the automotive policy and the increase in import tariff, Nigeria still experiences low patronage of brand new car which would have been a positive boost for the country’s auto economy.
A study by the online carsite Carmudi focused on the used car model aged 2008 to 2013 provided insights into the price difference across some countries in Africa. The study showed that Nigeria is the most expensive country to buy a car in Western Africa, with an average price of 19,547 dollars which is about 3.7 million naira while that of Senegal and Ghana are about $18,923 and $17,654 respectively. From the studies Nigeria, Senegal and Ghana rank top 3 when it comes to cost of used cars.
In 2013, Nigeria imported more than half a million cars 75% of which were used cars. Although the number of used cars imported in 2014 and 2015 reduced, Nigerians agreed it was because of the increase in custom tariff rather than availability of locally manufactured cars.
Despite being the most expensive country to buy a used car in West Africa, Nigeria still has a high demand for cars. Even though the middle class has grown three times larger than it was in the year 2000, very few brand new cars have been purchased.
One of the difficulties Nigeria’s experiences in the purchase on brand new cars is the lack of vehicle financing options as finance institutions give car loans with very high interest rates.
Amy Muoneke, Managing director of Carmudi Nigeria advised that affordable loan options should be made available to aid people who wish to own locally manufactured cars.
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