An investigation conducted by Shipping Position Daily has revealed that Nigeria has become a prominent destination for vehicles previously involved in mishaps (otherwise called accidented or salvaged vehicles) originating from the United States and Europe due to the escalating demand for such damaged cars in the country.
Checks revealed that Nigeria, renowned for its bustling automobile market, has continued to experience an unprecedented surge in the demand for accident and damaged cars.
Experts who spoke to our correspondent explained that the surge can be attributed to various factors, including economic constraints and the cost-effectiveness of salvage vehicles compared to new vehicles.
Our correspondent also gathered that the United States and Europe have been grappling with environmental issues leading to flooding and hurricanes.
In addition, stringent environmental regulations, coupled with heightened awareness of the need for sustainable practices, have prompted individuals to replace older vehicles with newer, more environmentally friendly options. Such less-desirable vehicles have consistently found markets in developing countries.
Recognizing this opportunity, exporters and salvage yards in the US and Europe have increasingly turned their attention to Nigeria as a prime destination for these vehicles.
Our correspondent further gathered that accidental or salvage cars, which have often been written off as beyond repair in other developed nations, have become Nigerians’ beloved bride owing to their affordability as compared to salvage-free vehicles.
Our correspondent, who visited some terminals in Lagos ports recently, suggested that roughly 85% of vehicles on-site are accidental vehicles. The terminals (names withheld) are filled with different types of accidented vehicles.
Additionally, checks by our correspondent revealed that salvage cars enjoy the benefit of lower Customs duty, compared to their non-accidental counterparts. This situation has made the country’s automotive industry become predominantly infected with more of such imported second-hand accidented vehicles.
In a chat with our correspondent, Mr. Chukuemeka Omemma, the Public Relations Officer of the National Association of Government Approved Freight Forwarders (NAGAFF), weighed in on the situation, remarking that, “It is quite straightforward: many Nigerians simply cannot afford brand new vehicles, considering the unfavourable exchange rates and the lingering impact of the 2014 benchmark/high duty rates (Vin-Valuation)”.
“Even accidented cars, once repaired now command significantly higher prices. For instance, a Toyota Corolla is currently priced at approximately ₦3 million or more, compared to ₦1.8 million in the past”, he added.
Contributing also to the discourse, a clearing agent; Mr. Festus Ukwu explained, “the prevalence of accidented cars in our ports is intrinsically linked to the duty rebates they previously enjoyed. However, following the government’s withdrawal of these rebates, many individuals find it financially challenging to meet the heightened duty, prompting some to abandon these vehicles. The once-attractive proposition of affordable accident cars has been notably affected by unfavourable exchange rates,” he said.
Another clearing agent, Theo Olanipekun, also stated that, “the rush for accidental vehicles is high. This is because with $2,000, you can buy an accidental Toyota car in the US, put together import fees, clearing at the port, and repairs; you may still spend less than N2 million. When the car is repaired, it may be sold for N9 million, while the new version of the same car may be selling for N16 million.
“So, with this kind of arrangement and also considering our economic status, if deliberate actions are not taken by the government to encourage the use of new cars by way of hire purchase or other financing schemes that may offer low-interest loans, Nigeria’s vehicle market will not grow,” he noted.
He said the country was getting too comfortable with used vehicles from developed nations being dumped on her, saying: “Very few people are aspiring to buy new cars in Nigeria. At the moment, the dream of many Nigerians is to drive a clean second-hand car. So, you see, gradually we are forgetting our vehicle manufacturing sector, because we no longer believe in our capacity as a nation to produce vehicles for our own usage,” he stated.
Also, a car dealer at the popular Berger auto market in Apapa, Nworie Tobechukwu, told our reporter that salvage ‘tokunbo’ vehicles have high market value in Nigeria. He noted that: “When you bring in an accidented car here and repair it, they become first-grade tokunbo, and you get a good price for it.
“Very few people have the capacity to buy new cars in the country. So, when they see a clean second-hand car with a reasonable price, they buy,” he stated.
Speaking also, as a member of the Motor Dealers Association of Nigeria, Mr. Oriola Olamilekan told our correspondent that the problem with the automotive industry is high prices for new vehicles. He blamed the situation on the unavailability of local content.
He explained that, “it is important that we produce spare parts here in order to beat the price of new cars down. Currently, the rise in the dollar is another factor fueling the high price of these vehicles.
“New vehicles are really expensive in Nigeria. Hyundai 1.2 litres, which is one of the lowest cars assembled here, is sold for N8.2 million; Honda City, 1.5 litres in a similar category, is sold for N10.4 million. Nissan Almera, 1.5 litres is selling for N8.25 million while Changan CS 35, 1.6 litres is sold for N8.5 million. How many people in Nigeria can afford to buy these cars at this rate? These are the lowest cars of each company, but see the prices. If you are talking about modern cars, then you should know that the prices are really high,” he stated.
