Nigeria New Vehicles sales dropped down in the first half hit by the fall of oil revenues, persistent civil war and low consumer’s consumption. Toyota over the 40% share first time ever.
Nigeria’s economy contracted in Q1 and its weak performance is likely to have carried over into Q2 as manifold headwinds persist. Militant attacks on oil production infrastructure have led to a drastic fall in output since February, increasing pressure on Nigeria’s key oil sector.
Nigeria produced only 1.51 million barrels per day (mbpd) in July, down from 1.55 mbpd in June, according to the Organization of the Petroleum Exporting Countries (OPEC). The government’s decision to resume amnesty payments to former militants from August will not be able to put an end to all the attacks as the Niger Delta Avengers (NDA)—the most active militant group—are not included in the deal.
June’s abandonment of the currency peg and the subsequent drastic depreciation of the naira were a step in the right direction to reduce elevated macroeconomic imbalances, but the economy will continue to suffer from a foreign currency shortage and low power generation.
Despite the recently renovated plans for expansion and the dream to base the country as an automotive hub for the central Africa, the sector is now facing a crisis with fall in the domestic consumer’s demand while new facilities are in place or are under construction to expand the local vehicles production.
While several observers had forecast a market booming at 200.000 units by the 2020, de facto in this year the crude reality is a fall from the basic 50.000 to a level near the 40.000.
Indeed, in the first half of 2016 vehicles registrations have declined at 21.270 units, down 18.0%
The sales distribution is changing, due to the effects of the NAP with benefit from OEMs local manufacturing and fall for importers. The winner is Toyota that in the first half have outpaced the 40% of market share, first time ever, while the rivals made in Korea are struggling.
The best-selling models was the Toyota Hilux with 2.056 sales (-3.7%) followed by the Toyota Corolla with 1.840 (+3.5%) and the Hyundai Accent with 1.154 (-24.5%).
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