The Head of Technical Services at Cars45, Damilola Ojurongbe, has declared that the foreign exchange crisis in Nigeria has led to increased prices for foreign-used cars, resulting in a reduction in demand as individuals seek more affordable options.
According to him, the change has benefited Nigerian used cars, in particular Japanese brands such as Toyota and Honda that have been experiencing an increase in demand.
He cited a report indicating that the Nigerian used-car market was now valued at over $1.4bn and expected to grow significantly by the end of 2024, according to The Punch.
He said the shift underlines the impact of the forex crisis on consumer preferences within the Nigerian automotive market, with a significant shift away from foreign used cars towards more affordable domestic options.
Ojurongbe stated, “We have been witnessing a steady rise in rates over the years, with the FX crisis impacting all car categories, especially foreign used cars due to their ties to exchange rates.
“This unpredictability has led dealers to pass on costs to clients, causing a surge in demand and prices for Nigerian used cars.”
He stated that the landscape of Nigeria’s automotive market was changing due to recent developments in import tariffs, taxation and legislation.
Ojurongbe claims that until the recent intervention of the Central Bank of Nigeria, the Nigerian customs authorities had started to use black market clearance rates.
However, he was optimistic that vehicle prices would be directly influenced by the proposed automation of port clearing operations in 2024 and influence consumer preferences and behaviour.
The value of Nigeria’s used vehicle imports increased from N325.05bn in 2022 to N1.063tn in 2023, representing a 226.46 per cent increase over one year, according to the 2023 National Bureau of Statistics foreign trade report.
In comparison with the previous year, this increase amounted to a staggering N736 billion.
