Second hand car market will be extinct by 2034.
The PricewaterhouseCoopers (PWC) on has predicted that the Nigerian auto industry is expected to produce about four million cars annually by 2050, noting that given the nation’s growth projections to be the ninth largest economy in the world and continued government support, the industry is expected to begin actual manufacturing with components locally sourced.
A PWC report presented by a Partner at the firm, Mr. Andrew Nevin, explained that the projected growth requires sustained and effective investment in the auto industry made only possible by the government implementing political, economic and legal policies that create a suitable environment for such investment.
Nevin who did the official presentation of the PWC auto industry report, during a seminar organised by the automobile and allied product group of the Lagos Chamber of Commerce and Industry (LCCI), added: ”We created three scenarios in this case depending on growth rate and the government support to the auto industry. By 2050, production in this country will hit almost seven million vehicles.
This sounds like an extraordinary number, but the population of Nigeria in 2050 could be larger than the population of the United States and the production currently in the United State is about 18 million vehicles and since Nigeria is going to be the ninth largest economy in the world by 2050, we expect that with an indigenous auto industry, it would be large.”
Imported used vehicles popularly referred to as ‘Tokunbo’ cars will become non-existent by 2034 as a direct result of local production.
“We believe that by 2050, Nigeria should produce over 4 million vehicles. We have also created a pessimistic scenario, which is the third scenario because the world might not turn out the way we think, but even with the pessimistic scenario, Nigeria will be producing about two million vehicles. Essentially, PWC is saying that by 2050, Nigeria is going to be a market that makes at least four million new vehicles a year and would also stop importation of used vehicles,” he added.
He said for Nigeria to fully accomplish it’s potential of becoming Africa’s automotive hub, there is need to improve the chances of owning cars, pointing out that available vehicle financing options is very important to encourage patronage of locally assembled cars.
Research indicated that 63 per cent of Nigerians cannot afford to own a car without some form of support to own a car.
Nigeria must also tighten its borders, maintaining that cars are the most smuggled goods after food between Lagos and Seme border.
“Grey market imports are thought to account for half of new vehicle sales in the country. Imports through the grey market are done to reduce or avoid duty payments by declaring false information. He said there is also need to protect the consumers, stating that with Original Equipment Manufacturers (OEMs) setting up their operations in the country, it is imperative that similar quality control attained in other developed markets is adhered to locally. There is also going to be the need for experienced car people, Nigeria can achieve its potential to produce over 7 million cars by building and working with people that really understand the industry. We believe that the Nigerian auto industry in 2050 would be producing up to 4 to 7 million cars, but it needs the support of the government policies and the industry to do the right things,” he said.