As you can already see that Naijauto.com is the number one car listing website in Nigeria that connects car dealers or sellers to potential buyers. It’s a major concern for us that most of the Nigerian auto dealers are currently complaining and lamenting low patronage as this is bad for the business.
They even observed that in the past, they normally experience patronage boost during election campaign periods but, a negative twist was the case for this year as they rather saw lower patronage compared to past years.
Specifically, for brand-new automobiles, ranging from heavy-duty vehicles, vans, commercial vehicles to passenger cars have all continued to face declined sales year-on-year now, leaving all the stakeholders in this sector in more of a dilemma.
According to The Guardian;
“Those particularly affected are stakeholders, who had upon the inauguration of the National Automotive Industry Development Plan late 2014, liaised with some foreign investors, to stake their resources in the emerging automotive sector.”
These affected investors were said to have come in large numbers with the hope that the Federal Government was committed truly to the automotive sector’s development, but not too long after they had staked their funds, they began to perceive some of the cracks in the government’s policy which they initially believed must have passed through all the necessary legislative process and probably waiting to for the executive to make an accent to it.
It would actually be an understatement to say that these stakeholders are in a dilemma. This is due to the fact that a higher percentage of them have even given up hope now that any meaningful thing could come from the earlier signed Memorandum of Understanding (MoU) with these local stakeholders, who are still endlessly waiting for the executive accent as at the time of writing this report.
The effect of election time on local businesses is unavoidable
As at the end of the 3rd quarter of 2018, transactions and situations at the auto marketplace were still not promising and had nothing to cheer about. As a matter of fact, by the end of the year 2018, performance index never ushered the tiniest bit of hope, as most of the emerging plants claim to have had a horrible year so far, with problems like underutilizing their plants and downsizing workforce.
The Guardian News claims that the auto dealers and stakeholders who spoke with them had expectations that the recent electioneering process for the 2019 elections would impact their automobiles’ sales positively only to be disappointed.
They stated that Media Advocate Limited - an automotive marketing and resource communications company, Principal Partner, Manny Philipson said;
“aside a staccato of above the line advertising, there wasn’t any serious injection of funds into other spheres of life”
““A significant percentage of the automobile merchants came from purchases initiated by the corporate sector of the economy, with little or no demand from the financially-stifled public sector”
Philipson claims that the electioneering process did not significantly contribute to the economy at all. He also went further to state that things even got worsened by the EFCC (Economic and Financial Crimes Commission) constant trailing of the well-heeled citizens who are mostly alleged of hoarding benefits from the previous government in Nigeria.
Manny Philipson said;
“I think this is the worst warm up to a major political dispensation we’ve had ever in Nigeria”
Similar comments and complaints came from Kunle Jaiyesimi – Massilia Motors’ Deputy Managing Director who said that it is a clear illusion for anyone to have had auto sales improvement expectations from the 2019 electioneering process because car dealers are not currently feeling any impact of the government on most businesses. He went further to say;
“Normally, January should have been a good month because of the expectations that they will pump in money compared to 2015, for some of us that sell pickups and buses, we had very good patronage from them especially our Chinese brands.”
“Usually they will buy and rebrand but this time around, they patronise fairly used. For example, Lagos State APC previously buy new buses and rebrand them, but this time around they bought fairly used Toyota Sienna buses. Importers of new vehicles and even assemblers have not felt the impact of the electioneering process on our businesses.” He said: “When the auto policy was introduced, the National Automotive Design and Development Council (NADDC), threw the carrot that the 35 per cent levy will be used for auto finance, that they will work out something with the Bank of Industry (BoI), and some commercial banks whereby they will give out loans at single digits. But what we have seen is we have been paying the 35 per cent levy, and we are not getting the benefit. Some of us that are into assembly operations are affected the most.”
Many more stakeholders and from reputable Nigerian automotive companies made similar comments and complains in general.
We only hope that things get a positive twist and turn out soon in the Nigerian automobile marketplace.
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