‘Macroeconomic challenges affecting vehicle sales’

Head of the Auto Sectoral Group of the Lagos Chamber of Commerce and Industry (LCCI), Kunle Jaiyesimi, said the macroeconomic challenges, including high exchange rates and inflation were adversely affecting vehicle sales.

In his assessment of the business performance this year, he said: “2024 has provided a topsy-turvy ride looking at the state of the economy. The purchasing power has been so eroded due to the depreciation of the naira.

“Prices have risen to a level that most private consumers cannot afford new cars. You notice that the major corporations are suffering. You can imagine how much they lost in terms of exchange rate.

“So that has impacted the procurement of new vehicles. We have more automobile maintenance services rather than new sales.

“If you look at the market figure, it has been so much reduced compared to what we had been having when the exchange rate was around N450, N480. So, it has not been a very good year for the automobile business.” He said Nigeria’s automotive industry is in a state of uncertainty due to prolonged delays in enacting the required laws to give investors the right direction.

Jaiyesinmi, who is also Deputy Managing Director of CFAO Motors, spoke in Lagos on the sidelines of the 2024 Nigeria Auto Industry Awards organised by the Nigeria Auto Journalists Association (NAJA).

He said: “For now we are in limbo. We don’t know what is happening to the auto industry policy; whether it is with the executive or it has gone to the National Assembly. We don’t have information on the stage that the policy is. I think NADDC is coming up with a stakeholders’ meeting. Maybe they would give us detailed information on the policy.”

Jaiyesinmi also spoke on the high interest, which is over 33 per cent as well as the recently announced government-backed N20 billion auto finance. He said: “Automobile loan is a no-go area for consumers. It is a bit tough now. We are just looking at 2025 to be a better year going by the appreciation of the naira in recent times. We are just praying that it can be sustained. If we can get that into the New Year, maybe vehicle prices would reduce.” He expressed optimism that the new Minister of Industry, Trade and Investment, Dr Jumoke Oduwole, would turn things around.

“I believe she should be able to drive this policy. She should try as much as possible to run away from the era of deceit. She should face reality, and I believe as a realist, her tenure would portend a good trend for the automobile business,” he said.