The sales of foreign AKA ‘tokunbo’ pre-owned vehicles have plummeted by up to 55% since the start of 2023. Many attribute the decline to the rapid rise of inflation and the USD-NGN exchange rate. These factors have been unfavorable to the average Nigerian.
More people are now opting for Nigerian used vehicles, which are generally considered subpar by the Nigerian population.
Based on one-on-one conversations with sellers and buyers of foreign pre-owned cars, we have identified six reasons why fewer Nigerians are buying foreign used cars:
Nigerian government policies and regulations related to car imports may have become stricter, making it more difficult or expensive to bring in foreign used cars.
This could include higher import duties, tighter restrictions, or increased scrutiny of the importation process.
Economic conditions can play a significant role in car-buying decisions. If the Nigerian economy is experiencing a downturn or if there are currency fluctuations, purchasing power may decrease, making it more challenging for individuals to afford foreign used cars.
Domestic Car Manufacturing
Nigeria has been making efforts to develop its domestic automobile manufacturing industry. The government’s policy to promote local production through incentives and support for local car manufacturers may have increased the availability of locally assembled cars.
This could make locally manufactured vehicles more attractive to buyers, reducing the demand for foreign used cars.
Foreign used cars, also known as “tokunbo” cars, are often perceived to have higher risks associated with quality, maintenance, and reliability.
Some buyers may prefer to purchase brand-new vehicles or locally manufactured cars, as they come with warranties and a sense of assurance regarding their condition.
The supply of foreign used cars may have decreased due to various reasons such as stricter export regulations in the countries of origin, limited availability of specific models, or reduced shipments to Nigeria.
A decrease in supply can drive up prices, making foreign used cars less affordable for many Nigerians.
With growing concerns about climate change and environmental impact, some buyers may be opting for more fuel-efficient and eco-friendly options.
Newer models or locally assembled cars may offer better fuel efficiency and lower emissions than older foreign-used cars.
It’s important to note that these reasons are not exhaustive, and individual preferences and circumstances can vary significantly.
Comment your own personal reasons why you would not purchase a foreign used car.