The car import market in Nigeria is a dynamic one, with various factors influencing the trends and fluctuations in vehicle imports. Used vehicles make up a significant portion of car imports, with their value changing over time due to policy adjustments, foreign exchange rates, and shifts in demand.
Nigeria primarily sources its imported vehicles from countries like the United States, Italy, Belgium, Germany, and Canada. Despite government efforts to reduce import reliance through increased tariffs and duties, the market remains strong, driven by the demand from ride-hailing services like Uber and Bolt.
In 2024, Nigeria witnessed a decline in passenger car imports due to factors such as inflation and naira depreciation, which led to an increase in foreign exchange rates and import costs. According to data from the National Bureau of Statistics reported by The Punch, the total value of passenger car imports dropped by 14.3% from ₦1.47 trillion in 2023 to ₦1.26 trillion in 2024.
This decline followed a significant surge in vehicle imports in 2023, where imports more than doubled compared to the previous year. However, economic challenges in 2024, including rising inflation, forex scarcity, and weakened purchasing power, resulted in businesses and consumers cutting back on non-essential purchases, including imported cars.
Despite the decrease in imports, Nigeria continues to focus on developing its automotive industry. The government introduced the National Automotive Industry Development Plan (NAIDP) to promote local production and reduce import dependency. Domestic manufacturers like Innoson Vehicle Manufacturing (IVM) have been producing vehicles, although large-scale exports are still limited.
Nigeria faced notable inflationary pressures in 2024, with the inflation rate reaching 34.60% in November and December, surpassing the previous year’s average rate of 24.52%. Food inflation was a significant driver, increasing to 39.84% in December 2024, attributed to rising import costs, currency depreciation, and structural challenges like poor infrastructure and high energy expenses.
The depreciation of the naira and escalating import costs have led to a significant rise in vehicle prices, making new cars unaffordable for many Nigerians. The removal of fuel subsidies in 2023 further impacted the market, with consumers prioritizing fuel-efficient vehicles, especially used sedans, over SUVs and multipurpose vehicles.
