Nigeria new car imports rise marginally in Jan, Feb

New vehicle imports into Nigeria in January and February rose marginally compared to the same period last year, as dealers stuck with old inventory held back from placing new orders, auto dealers said yesterday.Vehicle sales in the country are a proxy measure for private purchasing power, a leading economic indicator which is not formally available and can give insights into the Gross Domestic Product (GDP) growth that are not always captured in official figures.

The port figures showed new vehicle imports rose to 8,072 units in January and February combined, up 1.5 per cent on the same period of last year, according to vehicle importers.

The slower rise follows a 40 per cent jump in car imports over last year, port figures showed.

Industry executives said imports slowed at the start of 2012 because dealers had ramped them up too much last year on hopes that demand would pick up following relatively peaceful national elections and a completion of the country’s banking reforms.

Vehicle imports soared 40 per cent to 51,290 units in the 12 months to December 2011, partly as importers rose to meet demand from politicians on the campaign trail. Before polls, politicians often lavish huge party funds on cars for campaigning purposes or gifts.

Credit to the real economy had started to recover after a banking crisis in 2009, in which nine banks had to be bailed out, caused it to dry up. Central bank figures show credit to the private sector in 2011 grew 4.61 per cent.

But it was still short of 86 per cent growth attained in 2008, shortly before a banking crisis begun.

The imports grew steadily to an annual peak of 75,000 units by the end of 2008, almost double the level of two years earlier, as banks offered credit aggressively to a growing middle class for everything from refrigerators to equities.

But importers went into a steady decline after the banking crisis, falling 40 per cent in 2009 when credit dried up in the wake of a $4 billion bailout of nine lenders by the Central Bank. It also fell 18 per cent in 2010.

In 2008, credit sales had accounted for about 22 per cent of all vehicle sales, but that percentage dropped nearly to zero after the 2009 bank bailout and has since been struggling to recover.

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