The current economic recession is biting hard on both individuals and corporate organisations in Nigeria as the total retail sale of new vehicles for the first quarter of 2017 decreased by over 60 per cent from 5,500 units as at Q1 2016 to 2,000 units.
Also, the total vehicles imported into the country in 2016 dropped from 18,000 in 2015 to 7,000 in 2016.
According to him, the total retail market plunged by about 42 per cent from 32,000 units in 2015 to 18,000 in 2016. Managing Director, Toyota Nigeria Limited, Mr. Kunle Ade-Ojo, explained that the drop was caused by high duty on imported cars, shortage of foreign exchange and economic recession.
“The Federal Government had jacked up the import duty on cars from 22 per cent to 70 per cent to discourage vehicle importation and crashed duty on imported vehicle components by auto assemblers.
Only 350 new vehicles were imported by Nigerian auto firms in Q1, which shows a drop of about 90 per cent over 3,500 recorded in the same period last year. Commercial vehicles sold more last year at 70 per cent than passenger cars, which recorded 30 per cent of the total sales.
“The scarcity of forex affected business last year and that affected importation.
Also, there was the devaluation of the naira. Whereas in the first quarter of the year, the United States dollar was just about N200, by the end of the year, it had doubled.
So, prices of vehicles also doubled in the space of one year and a lot of businesses could not afford to pay for the increase given that they were also struggling to survive,” he said.
