The global automotive sales for 2015 are expected to hit $89 million, a 2.4% growth from 2014, with an emerging market share rising from 50% in 2012 to 60% by 2020, while their share of global profits is also set to rise by 10%.
A Whitepaper on automobile by Carmudi, an online marketplace for cars revealed that internet is injecting fresh impetus into the market.
According to the Whitepaper, the current and future state of the automotive industry in Nigeria and other emerging markets is being driven by the increase in Internet and mobile penetration, rising GDP, and the emergence of a middle class.
Titled ‘The Booming Automotive Industry in Nigeria,’ the Whitepaper revealed that 83% of car buyers crawl on the Internet to conduct research on a car before making a purchase in Nigeria.
“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,” said Christian Keller, managing director, Carmudi, Anglophone West Africa while unveiling the Whitepaper to the media in Lagos.
The Whitepaper also revealed that the 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.
It added 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 the car dealers surveyed reported a decrease.
Some Highlights Of The Whitepaper
The Shift to Online
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.
William Anumudu, CEO of Globe Motors said, “Currently, the number of people turning to the internet to for car purchases 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 associated with new trends, the internet is accessible anywhere and the fact that information is at their fingertips. Since people are embracing the internet all businesses online will profit.”
The Future Of Car Sales Market In Nigeria
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 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 auto 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, added, “2015 is the year of online car sales in Nigeria. 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.”