Due to rising inflation and the steep depreciation of the naira, Nigerians imported fewer passenger cars in 2024, as the cost of importing vehicles increased dramatically.
According to the most recent National Bureau of Statistics (NBS) international trade report, the overall value of passenger automobile imports decreased from N1.47 trillion in 2023 to N1.26 trillion in 2024, a 14.3% decrease. The drop came after a spike in imports the year before when the number of vehicles imported more than doubled in 2022.
However, the hard economic realities of 2024 compelled people and businesses to reduce their spending on non-essential items, with imported cars being among the most affected.
A change in consumer behaviour is reflected in the downturn; as the cost of new and imported used automobiles skyrocketed, many Nigerians resorted to the local second-hand car market.
Economic cycles, currency volatility, and changing governmental regulations have all had a major impact on Nigeria’s passenger automobile import trends during the last five years. Vehicle imports to the nation totalled N546.79 billion in 2020 and N695.40 billion in 2021.
However, due to rising demand and auto dealers’ accumulation of inventory, imports fell somewhat to N655.69 billion in 2022 before rising by 124.7% to N1.47 trillion in 2023. The previous year’s surge was reversed in 2024 with a steep 14.3% decline to N1.26 trillion, indicating the growing influence of economic instability on consumer spending.
Rising inflation was one of the main causes of this downturn since it reduced purchasing power and raised the cost of expensive items like vehicles, BrandSpur business and economy news reports.
In 2024, Nigeria’s headline inflation rate increased from 34.6% in November to 34.8% in December, marking a nearly three-decade high. The average annual inflation rate in 2024 was 33.2%, a significant rise from the 2023 rate of 24.7%. Many Nigerians emphasised necessities over expensive purchases like cars due to the ongoing rise in consumer costs.
As a result, the market for imported automobiles decreased as prospective buyers either decided to buy old cars or put off their purchases.
Importing cars became much more costly as a result of the naira’s depreciation, which also made the auto industry even more complex. At the end of 2024, the official exchange rate between the naira and the US dollar was N1,535/$, a 40.9% decline from N907.11/$ at the end of 2023. The naira fell 26.8% in the parallel market, from N1,215/$ at the end of 2023 to N1,660/$ today.
Also read: https://brandspurng.com/2025/03/11/black-market-dollar-to-naira-exchange-rate-today-11th-march-2025/
However, in 2024, the World Bank named the naira one of the worst-performing currencies in Sub-Saharan Africa, pointing to the Central Bank of Nigeria’s (CBN) delayed forex disbursements, increased demand for US dollars, and restricted foreign exchange inflows as the main causes of the currency’s depreciation. The research also noted that the naira’s depreciation has been made worse by the demand for foreign exchange from money managers, non-financial end users, and financial organisations.
The cost of foreign exchange continues to be a significant barrier for industries that depend on imports, even after the CBN introduced new forex policies intended to improve market transparency and draw in international investment. The sharp decline in the naira’s value made currency much more costly, which increased the price of imported cars and deterred many dealers from bringing in fresh inventory.
