Nigeria saw a significant drop in passenger car imports in 2024 as rising inflation and the sharp depreciation of the naira drove up the cost of foreign exchange, making vehicle imports more expensive.
According to the latest foreign trade report from the National Bureau of Statistics, the total value of passenger car imports declined by 14.3% to N1.26 trillion in 2024, compared to N1.47 trillion in the previous year. This downturn follows a sharp increase in imports in 2023, when vehicle importation more than doubled from 2022.
The decline in car imports reflects the broader economic challenges that impacted consumer spending in 2024. Rising inflation and currency depreciation led many Nigerians to cut back on non-essential purchases, with imported vehicles being among the hardest hit. Instead, consumers turned to the local second-hand car market as the prices of brand-new and foreign-used vehicles soared.
Over the past five years, Nigeria’s passenger car import trends have fluctuated due to economic cycles, currency instability, and shifting government policies. While imports stood at N546.79 billion in 2020, they rose to N695.40 billion in 2021 before declining slightly to N655.69 billion in 2022.
However, in 2023, imports surged by 124.7% to N1.47 trillion, driven by increased demand and stockpiling by auto dealers. The subsequent 14.3% decline in 2024 signals a reversal of that trend, underscoring the deepening economic strain on consumers.
A key factor behind the downturn was soaring inflation, which eroded purchasing power and made high-value items like cars less affordable. Nigeria’s inflation rate reached a nearly three-decade high of 34.8% in December 2024, up from 34.6% in November. On an annual basis, inflation averaged 33.2% in 2024, a sharp increase from 24.7% in 2023.
With living costs rising, many Nigerians prioritized essential expenses over large purchases, causing demand for imported vehicles to slow. Many buyers postponed their purchases or opted for more affordable, locally available second-hand cars.
At the same time, the naira’s sharp depreciation further complicated vehicle imports. The official exchange rate closed at N1,535 per U.S. dollar in 2024, a 40.9% decline from N907.11/$ at the end of 2023. The parallel market saw the naira fall by 26.8%, trading at N1,660/$ from N1,215/$ a year earlier.
The World Bank ranked the naira among the worst-performing currencies in Sub-Saharan Africa in 2024, citing high demand for dollars, limited forex inflows, and delays in foreign exchange disbursements by the Central Bank of Nigeria. While the CBN introduced new forex policies to enhance market transparency and attract investment, foreign exchange costs remained high, discouraging auto dealers from importing new stock.
