We read about predictions all the time; some come to pass while some are very far from what will really happen. I asked myself this question, "What will happen to car prices in Nigeria when the Coronavirus pandemic is over?" And this is me being very optimistic that the Coronavirus would soon flee the world and leave us to start chasing the best car prices on our next dream car.
Instead of a prediction on the exact situation of car sales in Nigeria after the pandemic, I will highlight a list of what will happen and how it will affect car sales in Nigeria.
Here is how the former Ford CEO Mark Fields thinks the automotive world will be affected by the COVID-19 pandemic :
How the automotive world is affected by COVID-19 pandemic
1. No money to buy cars
Immediately after Nigeria has been declared COVID-19-free, everyone will resume their jobs just to make up for all the lost work hours and reduced/cancelled labour rewards that the pandemic forced on everyone across the country.
People will not have car purchasing as a high priority for a long time. Some people lost their jobs while some got a salary cut, so most people in the country would have survived the pandemic with their financial savings.
Most Nigerians are not making money currently
However, we should always remember that some categories of Nigerians are making more money than they have ever earned in their working years because the pandemic period favoured the form of service they render. Services related to health and feeding made a lot of sales from panic buying of Nigerians when a lockdown was about to be declared. Manufacturers of face masks and sanitizers in Nigeria also made a lot of money this period.
These are the only set of people that can afford to chase the best car prices on their next car because they will have a good financial status improvement after the pandemic period.
2. Online car sales will flourish
Most car selling websites in Nigeria deal with a lot of used cars that need to be quickly sold by Nigerians. The fact that anybody can pick up their internet-enabled device(s) then search online for a car of their choice at affordable prices will make life easy for everyone.
Naijauto.com car selling website
Nigerians will go online more often to check for used car prices that are best for their pockets because as the country resumes normal activities after the pandemic, cheaper car prices are what Nigerian car buyers can expect and it would be a case of quantity over quality.
You should know how to buy cars online because, during this COVID-19 period in Nigeria, it is the safest way to buy a car.
Some car selling websites in Nigeria do car auctions where a number of people bid for prices of cars for sale. I am predicting that car prices at auctions in Nigeria would also fall because of the low demand for cars.
Seized cars about to be auctioned by Customs
On the Naijauto.com website, you can check for detailed car reviews on any car of your choice just to be sure the car you want would suit your personal lifestyle and taste. You can also buy cheap cars here.
3. Tokunbo/Used car dealers need money, cars will be cheaper
Car dealers that deal in used and Tokunbo cars in Nigeria have locked up cars in their lots for months because of the lockdown in major areas of Nigeria. This means they will be very eager to let go of these cars in exchange for money to stabilize their businesses.
A used Toyota Tundra car for sale in Lagos (Source: Oloworay)
Recall I said there is no money to buy cars? Well, some people will need to buy cars against all odds so, dealerships will still sell cars, and it will mainly be Tokunbo and used cars that the purchasing power of most Nigerians will be able to afford.
In fact, there could be a car price competition between Tokunbo and Nigerian used cars because dealers would have to devalue their Tokunbo cars to match the demand for cheap cars by the public.
Tokunbo cars are cars that are imported into the country after being used for a few years by their first-hand user. Tokunbo is a Yoruba term meaning "from Overseas", while used cars are cars that have been used by Nigerians but are up for sale. Used car prices vary according to the extent to which the car has been devalued by its owner.
Second-hand cars are the best categories of used cars in Nigeria and they are cars sold by their second owners who used them in Nigeria.
>>> You should know how to maintain your car(s) during this lockdown period so that cars you already own work well after COVID-19 wraps up.
4. Brand new cars will be expensive with low demand
The value of the Naira in the FX market has fallen, and this will affect the importation of brand new cars into the country. Nigerians won't even dare buy brand new cars because they would be so pricy as the dollar is now expensive compared to the Nigerian Naira. Also, there may be some disrupt of cars from overseas due to the strong impact of COVID-19 on Europe and the USA.
A Mercedes-Benz dealership in Lagos for brand new Benz cars
Shipping is also in dollars and remembers there is no money at the disposal of Nigerians for cars, so it's really a bad time for the value of Naira to fall. Nigeria Customs as of 17th of April already increased dollar rate from ₦306 to ₦360 for a dollar which is a 20% rise in rates.
Customs increased dollar rate by 20 Percent
Dealerships that deal in brand new cars in Nigeria have to reduce their supply so that their business runs smoothly because the demand for brand new cars will be very low.
It is even best they don't stock and only import on demand of Nigerian consumers.
5. Panic buying of cheap cars for social distancing in transit
There would be PTSD (Post Traumatic Stress Disorder) for most Nigerians from the COVID-19 pandemic. Now, we are all staying indoors, avoiding close contact with people, washing hands after every activity and always panicking when we cough/sneeze all in a bid to prevent the contraction of the Coronavirus.
Social distancing in a car
All these won't stop immediately because as humans, the behavior will become a natural habit. People will want to avoid public transportation by purchasing cheap cars they can ride to and from their businesses/offices. Gifting people cars after the pandemic in Nigeria would be much appreciated by people.
Toyota cars about to be gifted (Source: Elizade)
Used cars like second-hand cars/third-hand cars with a functional air conditioning system would be in high demand by this panic car buying category of Nigerians because there would be some fears of contracting the Coronavirus through airborne means. This can be prevented by riding around in a fully wound up car with the A/C working perfectly. There are various places where you can buy cheap cars in Nigeria that are in perfect condition.
It is very certain that there will be a reduced demand for cars in Nigeria after the pandemic. Used car prices will also drop as well as their Tokunbo counterparts and brand new cars will be the lowest in demand.
Tokunbo cars at a Port in Lagos
I even have a strong feeling that Nigerians that have been accustomed to buying brand new cars will try buying Tokunbo cars that are at present sitting in car lots because it is a win-win situation. Dealers need money and consumers want cars that have not been affected by the devaluation of the Naira.