The Director gave such forecast because of the industry’s achievement in the first quarter of the year. At that time, Nigeria’s Auto industry had imported about 350 vehicles from the nationwide ports, which is 10 times lower than the feature at the same time last year - 3,500 units.
According to him, imports decreased by about 90% between Q1 of 2016 and 2017. In terms of retail sales, the total units sold in Q1 was 2,000 vehicles, showing a 50% fall compared to this in Q1 of 2015. Particularly, Toyota has contributed 22 - 23% of Q1 sales to the auto market. Foreign exchange is still the main challenge while interest rates have risen up.
Explaining the increase in interest rates, Ade-Ojo said that the scarcity of the Dollar had led to the Naira’s scarcity, therefore, bank’s interest rates must go up flowingly.
“Even though the exchange rate has moderated from a high of about 520 to the Dollar and trading at about N400 to the Dollar, it is still not available,” he said.
The retail sales between 2015 and 2016 showed a considerable drop:
In terms of importation, the industry also brought a big reduction of about 60% from 18,000 units imported in 2015 to only 7,000 units in 2016. The Toyota Nigeria Limited's proportion of the imports also fell down from 43% to about 38% in 2015 and 2016, respectively.
To explain this downward trend, the Director stated that this was a result of the scarcity of foreign exchange, the difference of sub groupings, manufacturers and car distributors in Nigeria.
He added that the devaluation of the Naira was also one of the main reasons making the last year's total sales reduce. At the first half of 2016, the Naira was equivalent to about $200 but it had doubled by the end of the year. Therefore, prices of cars also increased sharply, even doubled, making many companies be unable to afford to pay for the increase. They even had to cut down their workforce, which caused the tough economic situation last year.
Moreover, companies also had to extend the number of years that their employees used their vehicles from 4 to 5 or even 6 years.