Nigerian Auto Sales May Decline Further in 2016, Auto Deal ContentManager predicts
Nigerian Auto Sales May Decline Further in 2016, Auto Deal Content Manager , Julius Oyedokun, predicts.
According to Oyedokun, the exchange rate is currently playing a critical role in the Nigerian Automobile Market with prices of cars rising uncontrollably.
He said, “Essentially, a depreciation in the home currency makes exports cheaper and imports higher; that is, If there is a depreciation in the value of the Naira, it will make Nigerian exports cheaper, and make imports into Nigeria more expensive.
“The Ciefas that changes against the Naira at about N370.00/1000CFA in October 2015 now goes for a whooping N518.00/1000CFA.
“While the central bank left the official rate of dollars unchanged at N197.00/$1 on its official interbank window, Nigeria’s naira hit a record low of N321.00/$1 on the parallel market on Thursday, as importers desperate to meet their obligations scrambled for dollars. Consequently, this has triggered up the prices of foreign used car to at least 38% higher in the Nigerian Automobile Market within the last 2 months.
“For instance, a full options 2002 Model Rx 300 sold at about N1.650,000 in October 2015 now sells for not less than N2.300,000 in the market.
No doubt, further depreciation will hurt poor Nigerians should the Central Bank of Nigeria refuse to revise the pegged exchange rate as Auto sales would probably start to decline and trend towards keeping cars longer will start to build.”