Nigeria’s automotive industry is facing a growing challenge from the influx of imported used vehicles, locally known as ‘tokumbo’, according to experts. While these vehicles offer a lifeline of mobility for many Nigerians, this rising dependence on imports is ringing alarm bells among experts and industry insiders.
Automotive experts who spoke to The PUNCH said this shift has immediate implications that demand attention from policymakers and industry stakeholders. They said that many of these vehicles, after serving their ten-year lifespan in their originating countries, find their way to Nigeria in compromised conditions.
According to a Battery and Power Systems Analyst at DM Lustrous Cars Ltd, Victor Ezeali, safety features, such as airbags, might be non-functional and essential components, like tires and suspensions, are often in a deteriorated state. He explained that unlike stringent roadworthiness standards in the West, Nigeria seems to adopt a more lenient approach, raising concerns about passenger safety.
“Many of the used cars Nigeria imports from these countries have been refurbished and will never pass a roadworthiness test there,” Ezeali said.
Nigeria imports 60 per cent of all used cars from the United States
According to the International Trade Administration, Nigeria imports 60 per cent of all used cars from the United States. The majority of these vehicles are Japanese brands, including Toyota, Hyundai, and Kia, renowned for their reliability. Despite this dominance, there’s a notable uptick in the acceptance of American car models, signaling a subtle shift in consumer preferences.
According to the Nigeria Customs Service, a total of 117,830 vehicles were imported into the country in the first quarter of 2021, while 97,132 vehicles were imported in the same period of 2022. The steady decline was witnessed in the first quarter of this year as a total of 51,782 Tokunbo vehicles were imported.
Speaking with The PUNCH, a Sales Professional at Rapida Mobility Solutions, Eniediabasi Henry, highlighted a shifting trend in Nigeria’s car market, emphasising the declining appeal of new cars due to customs duties and economic factors. Henry noted the influence of forex rates and the growing preference for well-maintained Nigerian cars. He underscored the substantial cost difference, citing examples like a 2014 or 2015 Toyota Camry priced at N8m to N10m compared to over N15m for a new one.
New vehicles like Changai and Geely are gaining popularity
Henry also pointed out a market shift with the introduction of affordable vehicles like Changai and Geely, foreseeing reduced importation and a significant impact on pricing and value. He said that these vehicles are considerably cheaper compared to well-known brands and offer similar features and performance.
“I don’t foresee this trend changing anytime soon. However, there is a shift happening with the introduction of new vehicles in the market such as the Changai and Geely. These vehicles are considerably cheaper compared to well-known brands,” Henry said.
He added that these vehicles also have lower maintenance costs and spare parts availability. He said that many Nigerians are opting for these vehicles as they provide value for money and convenience.
Government policies and incentives are needed to boost local production
Experts also called for government policies and incentives to boost local production and reduce dependence on imports. They said that Nigeria has the potential to become a hub for automotive manufacturing in Africa if it can create an enabling environment for investors and manufacturers.
They urged the government to implement the National Automotive Industry Development Plan (NAIDP), which was launched in 2013 to revive the sector. The plan aims to increase local content, create jobs, generate revenue, and reduce import bills.
They also suggested that the government should provide tax breaks, subsidies, loans, and infrastructure support for local producers and consumers. They said that this would encourage more Nigerians to buy locally made vehicles and create a sustainable market for them.
They also appealed to the government to enforce stricter standards and regulations for imported used vehicles to ensure quality and safety. They said that this would protect consumers from substandard and hazardous products and create a level playing field for local producers.