‘Used car constitutes 95 per cent of Nigeria’s auto market’

An automotive expert, Ganguly Soumobroto, has said that the purchasing power of Nigerians in acquiring new vehicles is low due to economic challenges facing the country, disclosing that the used car segment constitutes 95 percent of the market.

Soumobroto stressed the need for the organised private sector and banks to provide vehicle-financing services to both consumers and car dealers.

Soumobroto, who is the Chief Executive Officer of Cars45, an auto-trading platform, advised banks to create a credit database of eligible consumers to simplify auto financing and address issues bothering repossession of the vehicles in case of default.

“It is very difficult to finance a car which would break down after six months,” he said.

While briefing newsmen on the activities of the year, he said the used car segment constitutes about 95 per cent of car dealerships in Africa while five per cent is just for new cars.

He said in Nigeria alone where it has its footprint in about 11 states, Cars45 sells 750,000 cars annually.

Speaking on the purchasing power of Nigerians in acquiring new vehicles, he said there is more stability at the high-end of the market as government’s purchase power remains strong.

“People would rather spend money on food and shelter rather than buy a new car. People have delayed purchase and sale of their cars,” he said.

On the recent management changes, the CEO said Frontier Car Group (FCG) which had invested in Cars45 Series A Funding raised in May 2017 was acquired by OLX Group in November 2019 to demonstrate their ambition to lead the used car online market.

The company noted that its expansion into Kenya and Ghana is growing while strengthening its partnerships with car manufacturers and original equipment manufacturers (OEMs), including KIA, Kelwarams and CFAO, to facilitate new car sales and ownership.

Also speaking during the briefing, Head, Marketing and Communications, Shola Adekoya, reiterated the company’s commitment to driving the growth of the automotive sector in Nigeria and ensuring that car-buying and ownership becomes a seamless, safe and secure experience for consumers.

“We take our responsibility of providing quality service offerings underpinned by transparency and integrity very seriously. It is incumbent upon us to develop value-based products that will enhance value creation for the Nigerian used cars marketplace.”

Head, Lead Management and Marketplace, Patricia Duru, noted that Cars45 has prioritized the delivery of a transformative customer experience for all stakeholders even as its marketplace provides value and variety for consumers.