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AUTOMOTIVE MARKET OVERVIEW

Nigeria has the potential to be the fastest growing African economy, with a projected annual GDP growth rate of 4.2% in the period 2016-2050. This will push it up the GDP rankings to become the 14th largest economy in the world by 2050, according to IMF and PwC estimates.

 

The population, currently around 230 million, is expected to double over the next 30 years, at a population growth rate averaging around 2.3% a year. For what has been a young country, Nigeria is now entering a period of strong growth in the working age population.

 

Nigeria is the biggest market for used cars in Africa, and is also one of the most affluent in the sub Saharan region.

 

Service sectors such as logistics will see significant advances, benefiting from the development of infrastructure and transport networks. This will help boost Nigeria’s manufacturing industries.

 

Nigeria’s growing economy also means that the middle-income, middle class sector is set to expand beyond 40 million, and consumers will increasingly want their own vehicles, increasing the demand for automotive maintenance and repair services.

 

NAIDP

To boost the domestic automotive industries, the Nigerian Government introduced its National Automotive Industry Development Plan (NAIDP) in 2013.

 

New car assembly is still relatively small, accounting for 15% of car sales in 2015, but with government policy to promote domestic assembly, and with licences being granted, the trade should soon start to expand rapidly, meaning parts will be needed.

 

If the NAIDP comes to fruition, the current automotive industry workforce of under 3,000 workers could generate 70,000 direct jobs, and 210,000 indirect jobs.

 

Currently, around 35 companies have been granted licences to assemble vehicles. With the commitment to develop the domestic car production market, the long-term forecast is that 70% of new cars sold will be manufactured or assembled in Nigeria by 2050.

 

Automotive Sector

Nigeria is Africa’s automotive hub. PWC indicates in their most recent analysis that the ratio of used car to new car sales is 75:25, and for every new car there are 131 used cars on Nigeria’s roads.

 

There were an estimated 11.5 million vehicles on Nigeria’s roads at the start of 2017, according to the National Bureau of Statistics. Of these, 44.5% are privately owned, and 53.8% are commercial.

 

But the age of the vehicles means there is a constant need for vehicle parts and accessories. Over 60% of cars on Nigeria’s roads are more than 12 years old, while only 11% are under five years old.