The automobile sector of the economy is yet to fully recover from the economic downturn that plunged sales in the industry.
According to the Managing Director, Toyota Nigeria Limited, Kunle Ade-Ojo, a total of 7,000 new vehicles were sold in the third quarter of 2017, representing 48 percent decline from 14,500 units sold in the same period in 2016.
“As of the end of the third quarter of the year, the vehicle sales were 7,000 units compared to about 14,500 last year, which is a drop of about 48 percent in sales.”
However, the managing director said there is a slight improvement in importation in the third quarter when compared with the first quarter of the year when about 90 percent decline was recorded.
“From the importation point of view, there is a slight improvement because, in the first quarter, we had about 90 percent drop, but as of the third quarter, the drop had reduced to 62 percent.”
Four years ago, the Nigerian Automotive Council had given 50,000 as the annual figure of new vehicles sales in the country against about 500,000 for used vehicles.
But the drop in the Naira value against the US dollar and the surged in import duty from 22 percent to 70 percent weighed on business activities in the industry and plunged sales and importation/assembly.
The economy recovered from the first recession in almost 25 years in the second quarter, after contracting for five quarters. Suggesting that recovery is not broad-based and certain industries are still struggling to tap into the renewed business confidence and surged in economic activities in the country.
According to Ade-Ojo, “Most sales were more of commercial vehicles. In 2018, we hope to see a bit of balancing with the recovery of passenger vehicles. This year, a lot of companies were very careful because of the economic recession. They buy vehicles that will help improve the productivity of their business.”
“As the economy improves, so will there be balancing of sales across the models and vehicle segments.”
Toyota Nigeria has the largest market share in the automobile industry as of the third quarter of 2017. The company projected an increase of 2 percent from current 22 percent to 24 percent in 2018.