Managing Director, Carmudi Nigeria, Christian Keller has pointed out that 2015 is the year of online car sales in Nigeria. Keller observation was as result of the findings arising from Carmudi quantitative surveys conducted online with both car buyers and car dealers, and in-depth interviews with industry influencers throughout Nigeria. He however, made the disclosure during a press briefing tagged ‘The Booming Automotive Industry in Emerging Markets’ in Lagos recently.
The forum which provided a platform for both car dealers and buyers examines the current and future state of the automotive industry in Nigeria and other emerging markets It also provided a detailed look into the global state of automotive sales and how car purchasing behaviors have changed due to the drastic increase in internet and mobile penetration, rising GDP, and the emergence of a middle class.
Speaking further, the Carmudi boss said that “with an unmatched growth rate in online car searches in Nigeria and a rapidly growing middle class, Carmudi´s report affirms that our investments to become the No. 1 online car marketplace in Nigeria were worth it.” On the State of Global Car Sales, Keller said “Global automotive sales for 2015 are expected to reach close to $89M, a 2.4% growth from 2014. Emerging markets’ share of global sales will rise from 50% in 2012 to 60% by 2020, while their share of global profits is also set to rise by 10%.
When it comes to new cars, purchase intent is strongest in Asia, where 65% of respondents say they will buy new cars in the next two years, compared with 7% who plan to buy used cars”.
Globally, auto E-Commerce has grown at such a staggering rate that now as many as 80% of new car customers and almost 100% of used car customers begin their car shopping experience online. With internet and mobile penetration significantly growing in emerging markets, the rate of moving the car shopping experience online is beginning to mirror that of Western Markets. In Nigeria, the biggest source of the new middle class in Africa, 83% of car buyers report using the Internet to conduct research on a car before making a purchase,” Keller added.
It also noted that Carmudi study observed that 30% of car dealers in Nigeria reported an increase in car sales over the past twelve months due to the changing economic climate, while 50% of car dealers surveyed reported a decrease, adding that “Nigeria’s auto industry remains relatively strong, but critical policy changes, like the National Automotive Industry Development Plan, have the potential to change the entire industry”.
Keller equally pointed out that “83% of Nigerian car buyers reported turning to the internet, blogs, forums, and social media when researching cars. The majority of Car Dealers responded that up to 80% of their customers turn to the internet and social media for auto research. The responses also proved that offline media, including newspaper classifieds and auto expos (under 10%), are declining as a source for buyers.
Nigerian car dealers are also getting more and more digital when advertising their listings. Around 80% of car dealers are now primarily focused on advertising their car listings online”. CEO of Globe Motors, William Anumudu, said, “Currently, the number of people turning to the internet to for car purchases has been on the increase. A lot of people use the internet to search for information, products or services.
Any business that wants to excel must go digital. This is due to the fact that Nigerians like to be associate with new trends, the internet is accessibility to the internet anywhere and the fact that information is at their fingertips. Since people are embracing the internet, all businesses online will profit.” According to Carmudi boss, Nigeria has been heavily dependent on auto imports, which account for the largest share of the country’s foreign reserves each year.
New vehicle assembly plants, he said are expected, and the number of imported cars has already declined significantly – from 11,563 in January to 7,400 units in February. “Last month’s historic election of Muhammadu Buhari has generated uncertainty surrounding the autos sector. Although the party is pro-business, some industry stakeholders disagree with elements of the Autos policy, such as second-hand dealers who will lose out from the 70% tax on imports, or who would like to see full implementation of the policy deferred. Buhari could choose to reverse all or some sections of the Automotive policy to secure more support with these stakeholders”, Keller said.