Nigeria new cars market slow in the first half 2015 hit by the sharp fall of oil price in the international market while the new government has taken five months to start operating. Toyota led the market ahead of Koreans while over 30 OEMs required licence to produce.
Five months after taking office, on 11 November the new cabinet led by President Muhammadu Buhari was finally sworn in. As expected, Buhari retained control of the all-important oil ministry, while former investment banker Kemi Adeosun was appointed as Finance Minister. The new government will have the challenge of rekindling the economy after growth slowed to multi-year lows in Q2 amid a dramatic fall in oil prices and fighting the strong Boko Haram insurgency in the northeast of the country.
One of the key decisions that the new government will have to make in the coming months will be whether or not to remove fuel subsidies to narrow the government’s rising fiscal deficit. Meanwhile, a recent business survey suggests that the appointment of the new cabinet is bolstering businesses sentiment.
Recent data confirm the huge potential interest for this market with over 30 global companies that have required the licence to produce locally after the introduction of the 2013 Nigeria National Automotive Plant.
Honda started the production of Accord in July while Volkswagen has re-started the operation at the old plants, while producers are coming from all over the World (like Nissan and Hyundai) to join a big party that should be represented by a country ranked 8th in the World and 1st in Africa as number of citizens.
The issue seems to be the availability of a minimum income to purchase a new car rather than repair the old one or purchasing one pre-owned and imported.
The country continues to suffer from falling oil prices and internal security threats. Further constraints on business activity via the country’s control of the availability of foreign exchange could also obstruct growth going forward.
The consequence are reflected in a stagnating level of sales with the +11% increase scored last year followed by a -5.5% reported for the first half 2015, with sales at 26.472 units, well below the observers expectations.
The market leader is Toyota with first half share at 27% with sales fell 4% at 7.200 units. Second was Hyundai with 15.5% of share and third Kia with 8.5%.
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