NOVEMBER 16, 2016 – The current economic crisis facing the country has led to a decline of 37.5 per cent in demand for new and used automobiles from 400,000 annually to 250,000.
The Director-General, National Automotive Design and Development Council, Mr. Aminu Jalal, confirmed the development during a chat with journalists on Tuesday in Abuja
He said the harsh operating environment affecting every sector of the economy was also taking its toll on the automobile sector, with companies operating there struggling to survive.
Jalal added that before the economic crisis, the country was recording an annual sale volume of 450,000 cars, adding that this had dropped to about 250,000 owing to the drop in the people’s purchasing power.
He added that for everyone per cent increase in Gross Domestic Product growth rate, there is an increase of two per cent in the demand for automobiles.
Jalal lamented that with the recent decline in the Gross Domestic Product growth rate, the vehicle replacement rate for most people had reduced.
He said, “The current economic situation is affecting the market share of vehicles. For every one per cent growth in GDP, demand for vehicles grows by two per cent.
“But when there is recession, people stop buying vehicles and the demand goes down. A lot of people will not want to change their vehicles because of the economic situation and you will expect them to keep using such car for a longer period.