The Nigerian automobile industry is facing a severe crisis as car prices have surged by over 126 percent in the last eight years, leading to a drastic decline in vehicle sales and sidelining a large portion of the country’s middle-income buyers. Industry stakeholders are raising alarms about the implications of this steep price hike, calling for urgent government intervention to revive the struggling sector.
According to Kunle Jaiyesimi, President of the Automobile, Boatyards, Transport Equipment and Allied Employers of Nigeria (AAABTEAEN) and Deputy Managing Director of CFAO Motors, the average price of a mid-size SUV has skyrocketed from about N18 million in 2017 to nearly N80 million today. This unprecedented jump has crippled demand and shrunk the customer base considerably.
“The market has shrunk dramatically,” Jaiyesimi told ireport247news.com. “Eight years ago, a mid-size SUV cost N18 million; today, you cannot get one for less than N80 million. Unfortunately, there is no consumer financing structure in place to help Nigerians cope with these price increases.”
The impact is reflected in sales figures. Jaiyesimi disclosed that the industry was once moving between 120 to 150 vehicles monthly, but last year, total new vehicle sales barely crossed 18,000 units nationwide. The government remains the sector’s largest buyer, highlighting the weak private market.
Jaiyesimi also criticised the slow progress of Nigeria’s automotive policy, which was launched over a decade ago but has failed to create an enabling environment for investors and consumers alike. He lamented the lack of government presence and engagement during key sector events, such as the recently held West Africa Automotive Show 2025 in Lagos, where international stakeholders gathered to promote investment in local vehicle assembly and parts manufacturing.
“It’s disheartening that none of the ministers or the Director-General of NADDC attended this major event. Foreign investors see this as a sign of neglect,” he said. “Meanwhile, Ghana, which started its auto policy earlier than Nigeria, now hosts seven manufacturers and 15 vehicle brands. We lag behind in developing full local assembly.”
Jaiyesimi also raised concerns over the government’s tendency to exclude local partners during international negotiations. “When officials travel abroad to meet automakers like Toyota without involving local stakeholders, it undermines domestic efforts to grow the industry.”
One longstanding proposal from the automobile sector is a 35 percent levy on fully built imported vehicles, intended to fund a consumer credit scheme that would allow Nigerians to buy cars with affordable loans at single-digit interest rates. Jaiyesimi said such a levy could have generated over N200 billion since 2014, providing critical financing support.
He welcomed the recent announcement of a N20 billion vehicle credit scheme by President Bola Tinubu’s administration but called for more expansive and sustainable financing solutions.
Ngozi Emechebe, President of the Auto Spare Parts and Machinery Dealers Association (ASPMDA), highlighted the importance of affordable spare parts, especially as Nigeria considers shifting towards gas-powered vehicles. “If gas supply is unreliable, people cannot make the transition from petrol vehicles,” she said.
Emechebe stressed that local content policies must be backed by actual manufacturing investments. “In the 1990s, about 50 percent of vehicle parts were made locally. Now, almost everything is imported. If economic conditions improve, and government support materializes, we can revive local production capacity.”
She also urged local automakers like Innoson and Nord to improve the availability of spare parts to the public. “If I want to import an Innoson headlamp, I should be able to do so easily. Accessibility is crucial for mass adoption of vehicles.”
The automotive sector’s call to action includes expanding consumer credit schemes, strengthening the national automotive policy, and actively involving local stakeholders in global investment talks. Without these measures, dealers warn that the sector will continue to shrink, with Nigeria missing out on the economic and employment benefits of a thriving auto industry.
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