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BLURBNigeria’s vehicle population data reveals towering opportunities

BLURBNigeria’s vehicle population data reveals towering opportunities
  • The National Bureau of Statistics revealed that as at the third quarter of 2017, Nigeria had about 11,547,236 motor vehicles in the country.
  • About 4,656,725 of these vehicles are privately owned while, 6,749,461 vehicles are registered as commercial vehicles. Another 135,216 vehicles are registered as government owned vehicles while 5,834 vehicles are registered for diplomats.
  • Nigeria’s vehicle per person is therefore 0.06 as at the third quarter of 2017.
  • This presents huge opportunities for local vehicle production and assembly in Nigeria

Third quarter 2017 data from the National Bureau of Statistics (NBS) reveals that Nigeria has a total vehicle population of about 11,547,236.

For an economy with an estimated population of 193,392,517 as at 2006 (as per NBS report), a total motor vehicle of just 11.5 million appears to be very small, representing just 0.06 vehicle per person.

Total Vehicles

According to the data, Nigeria has a total of 11,547,236 motor vehicles in the country, recording a 0.78% growth from the 11,458,370 vehicle population reported in the first quarter of 2017. This means, a total of 88,886 vehicles were bought between March 2017 and September 2017.

With a population of 193.3 million Nigerians, the data suggests that the total number of Nigerians available to one vehicle is 16.75. In terms of vehicles per 1000 Nigerians, it comes to about 59.7.

As at 2016, China and Brazil had 154 and 249 respectively.
One can infer, based on this data, that Nigeria’s vehicle market is still largely untapped as more Nigerians need to own their own vehicles.

Private Vehicles

Private vehicle data in the country currently stands at about 4,656,725 or 40.33% of total vehicle population. On the basis of private vehicles only, vehicles per 1000 Nigerians comes to about 24. It is also about 41 Nigerians to one private vehicles– one of the lowest among its emerging market peers.

Commercial Vehicles

The data also reveals that Nigeria has a total of 6,749,461 commercial vehicles which is about 58.4% of total vehicle population in the country. In terms of vehicles per 1000 population, a total of about 34.9 vehicles are available per 1000 Nigerians.
This is an extremely low number and perhaps explains the difficulty in transporting Nigerians from one destination to another. Currently, Nigerians rely heavily on commercial motorcycles or tricycles (which is not included in this data) to commute either quickly or for short distances.

Vehicle Growth

Quarter 1 data from the NBS reveals a total vehicle population of about 11,458,370 suggesting an increase of about 0.78% or 88,866 from the previous quarter. On further inquiry, we were made to understand that the figure was revised as it included motorcycle data. Thus, it is not reliable for determining the number of new vehicles in the country.

However, information from the MD of Toyota Nigeria, Mr. Kunle Ade Ojo, in July revealed that the total sales figure of vehicles across the country including all brands stood at 2,000 units when compared to 5,500 vehicles sold within the same period in 2016.

He also said that, “The poor sales of vehicles are attributed to the scarcity of foreign exchange, devaluation of naira and the high interest rate coupled with the economic shortfall, hiked prices of vehicles, and crippled buying power of many buyers.”

Another contributing factor to the fall in sales of Made-in-Nigeria cars is the high rate of importation of foreign cars by Nigerians.

The Director General (DG) of the National Automotive Council, NAC, Mr. Aminu Jalal also disclosed that Nigerians spend about ₦600 billion annually on importation of vehicles. He explained that about 50,000 new and 150,000 used vehicles are imported into the country yearly.

The Federal Government currently has a vehicle automotive policy which was launched by the Goodluck Jonathan administration in 2014.

State of Made in Nigeria cars

The Government in 2015, through the National Automotive Design and Development Council (NADDC), awarded licences for the establishment of 12 new vehicle assembly plants in the country.

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The companies are automobile manufacturing giants such as Toyota, Honda, General Appliances West Africa, Perfection Motors Company, and Richbon Nigeria.
Others are R.T. Briscoe Nigeria, Nigeria-China Manufacturing Company, Nigeria Sino Trucks, Coscharis Motors, DAG Motorcycle Industry Nigeria, Globe Motors Nigeria, Century Auto-Assembly Nigeria, and Concept Auto Centre.

Last October, Coscharis Motors, Nigerian distributor of the Ford automobile brand, unveiled a vehicle assembly plant in Lagos said to be worth about N5 billion. It claimed that the assembly plant is the first of its kind in sub-Saharan Africa with only South Africa having another assembly plant in the whole continent.

Nissan however, claims to be the first automaker to build cars in Nigeria through a collaboration with Stallion Group. Also, last year, Perfection Motors Company Limited (a member of Lee Group) and FAW, China, announced that they set up a Semi-Knock Down (SKD) auto assembly in Ikeja, the commercial capital of Lagos.

The policy has obviously attracted gradual return of vehicle assembly plants in Nigeria but not yet at a level where it can make an impact on the retail market.

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Huge opportunity

For Nigeria to achieve a vehicle per capita (1000 persons) of at least 150, we will need to have a total of about 29 million vehicles, which is about 18 million new vehicles, revealing just how huge the current gap is. The gap for private vehicles is even more humongous.

Is this achievable? Probably not but if you consider that the US sold about 6.9 million passenger cars in 2016 alone, then you get the size of the opportunities that currently exist. In fact, global projected car sales in 2017 is put at about 78 million and production, about 62 million.

Ride sharing market

For ride sharing apps like Uber and Taxify, the data also reveals a huge gap still left to be covered in Nigeria, Africa’s largest market. Latest data from Uber shows that Nigeria has 7000 Uber drivers and 267,000 riders.

This comes to about 26 drivers per 1000 Nigerians, much lower than the 34.9 vehicles per 1000 Nigerians average for Commercial vehicles, indicated above.

Car merchants

Nigeria is also home to a flurry of websites that are dedicated to selling used cars. The growing number of these online market places also indicates just how huge the opportunities are in the vehicle industry.

By simply listing your vehicles on their market places, sellers get exposed to a market made up of millions of Nigerians looking to buy their first cars. It is also a market place for determining going prices for all types of vehicles.

As more of these merchants become available, pipelines of selling fairly used in Nigeria cars will only expand, further boosting the supply side of the market.

 

Date: December 11, 2017
Source: nairametrics
Photo Credit: nairametrics

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