Nigeria’s automobile industry is facing one of its toughest periods in years as the sharp decline in vehicle imports underscores a broader drop in consumer purchasing power and weak business activity across the transport and retail sectors.
According to fresh data from the National Bureau of Statistics (NBS), passenger motor car imports into Nigeria fell by 9.69 per cent in the first half of 2025, reaching ₦479.26 billion compared to ₦530.67 billion recorded in the same period of 2024.
The trend marks a continuation of the downturn from previous years, when total imports dropped from ₦1.47 trillion in 2023 to ₦1.26 trillion in 2024 — a 14.29 per cent decline year-on-year.
A breakdown of quarterly figures showed that Nigeria imported ₦224.58 billion worth of vehicles in Q1 2025 and ₦254.67 billion in Q2 2025.
In contrast, Q1 and Q2 2024 saw ₦238.73 billion and ₦291.93 billion respectively, reinforcing the steady contraction in vehicle imports since 2023.
Dealers Struggle to Stay Afloat
Auto dealers and analysts say the decline in vehicle imports in Nigeria is not surprising given persistent foreign exchange volatility, rising import tariffs, and reduced consumer incomes.
These factors, they say, have combined to make car ownership an expensive dream for most households and businesses.
A Lagos-based auto dealer, Seun Abolaji, said high import duties and the cost of foreign exchange have crippled the market.
“You can’t separate Nigeria from global market dynamics.
Even though the dollar has stabilised lately, it remains high.
Once you import a car, the total cost, including payment to manufacturers and customs, is already inflated,” he said.
He added that customs tariffs on both new and used vehicles are now unbearable.
“Dealers are paying close to 100 per cent in duties. The difference between Tokunbo and new vehicles is now so small that it discourages imports altogether,” Abolaji explained.
With the average new vehicle now priced between ₦40 million and ₦100 million, and fairly used cars costing ₦10 million to ₦25 million, many Nigerians are postponing purchases and focusing on maintaining existing vehicles.
“People are prioritising food, rent, and school fees over cars. Even fuel costs discourage ownership,” he said, adding that dealers have shifted to selling cheaper Chinese models, which have gained market share due to affordability.
Auto Businesses Face Decline
Industry sources say the fall in vehicle imports in Nigeria has forced dealers to cut costs, diversify operations, and lay off workers.
Some companies that sold 3,000 units annually now struggle to sell 500, while corporate fleet purchases — once a key driver of bulk sales — have almost vanished.
Abolaji noted that after-sales and maintenance services have become lifelines for many car dealerships.
“We now focus on repairs and parts because that’s where the money is. Selling cars alone can’t keep the business running,” he added.
The President of the Importers Association of Nigeria (IMAN), Kingsley Chikezie, confirmed that affordability remains a major barrier to new vehicle acquisition.
“The income per capita is too low. It’s difficult for anyone earning an average salary to save ₦10 million to buy a car,” he said.
FX Pressures and Tariffs Deepen Market Pain
Economist and former President of the Chartered Institute of Bankers of Nigeria, Prof. Segun Ajibola, said the consistent fall in vehicle imports in Nigeria reflects the harsh macroeconomic realities confronting businesses and consumers alike.
“The depreciation of the naira has pushed up the cost of imported goods.
With weak purchasing power, most car owners prefer to refurbish existing vehicles rather than buy new ones,” Ajibola explained.
He added that the data may underrepresent the situation, as smuggling remains rampant.
“A large number of Tokunbo vehicles enter through unofficial channels, evading customs duties. This distorts the market and makes it harder for legitimate dealers to compete.”
Ajibola also noted that corporate organisations have scaled down on vehicle purchases, opting instead for maintenance of existing fleets. “Maintenance and refurbishing now dominate the sector,” he said.
Local Production Still Weak
Despite several government initiatives to promote local assembly and consumer credit, stakeholders say vehicle imports in Nigeria will continue to dominate until local manufacturing becomes viable.
According to the Centre for the Promotion of Private Enterprise (CPPE), the motor vehicle assembly sector contracted by 1.5 per cent in Q2 2025, reversing previous gains due to weak demand and rising import costs.
CPPE Director Muda Yusuf emphasised the need for stable policies and consistent government patronage of locally assembled vehicles.
“Without policy consistency and government procurement support, local assembly plants will remain underutilised,” he said.
Similarly, Lambert Ekewuba, Executive Director of the Motorcycle Manufacturers Association of Nigeria, said Nigeria’s automotive value chain lacks Original Equipment Manufacturers (OEMs).
“To succeed, we must convince global OEMs to bring their technology here and build production capacity,” he added.
Credit Schemes Offer Limited Relief
The Federal Government, through the National Automotive Design and Development Council (NADDC) and the Nigeria Consumer Credit Corporation (CrediCorp), has launched initiatives like the ₦100 billion vehicle ownership credit scheme to make cars more affordable.
However, analysts say the impact remains minimal as most Nigerians cannot meet repayment conditions. “Until incomes rise, no amount of credit can fix affordability,” Ajibola warned.
A Call for Policy Rethink
Dealers and economists agree that the solution lies in rethinking Nigeria’s tariff policies and investing in domestic manufacturing.
“Reducing import duties and providing incentives for local assemblers can revive the auto market,” Aregbesola advised.
Ajibola concluded, “Vehicle imports in Nigeria will keep falling unless household incomes rise and credit access expands. The market decline mirrors the wider economic hardship.”
As the data show, the once-thriving auto trade — a reflection of middle-class mobility and business strength — now symbolises the growing economic strain facing millions of Nigerians.
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