Nigeria’s car market shifts to high-end SUVs as import costs rise — Bassey-Duke 

Nigeria’s automotive market in 2025 has indeed shown a notable shift toward high-end SUVs, driven by escalating import costs and economic pressures, as highlighted in recent reports. This trend reflects broader changes where importers prioritize luxury vehicles for better profit margins amid thinning viability for affordable models. However, the market is multifaceted, with a simultaneous surge in overall imports and a rise in affordable Chinese brands challenging traditional players.

Reasons for Rising Import Costs

Several factors have contributed to higher import expenses in Nigeria this year:

• Customs Levies and Duties: The introduction of a 4% Free on Board (FOB) levy by the Nigeria Customs Service in August 2025 has increased clearing costs by up to 40%. For instance, a vehicle valued at N4,141,854 incurs additional charges like N165,674 for the FOB levy, alongside 20% duty (N828,370) and other fees, making total costs 30-40% of the vehicle’s value. This replaces the prior 1% Comprehensive Import Supervision Scheme but retains a 7% surcharge, leading to abandoned vehicles at ports when clearing exceeds purchase prices.
• Foreign Exchange Volatility and Tariffs: Fluctuating FX rates, combined with new tariffs (including potential impacts from U.S. policies under Trump), have raised used car prices. Shipping from the U.S. averages $1,200–$1,300 per vehicle, with overall import costs up due to naira devaluation. Earlier in the year, FX crises pushed prices higher, though stability in H1 2025 has mitigated some effects.
• Economic Pressures: Inflation and post-COVID currency issues have caused vehicle prices to soar 350% in recent years, turning car ownership into a luxury. A used 2006 Toyota Corolla now costs N6–9 million, up from under N3 million three years ago.

These costs have disproportionately affected affordable segments, prompting importers to adapt.

Shift to High-End SUVs

With profit margins on budget vehicles like Toyota Corolla or Honda Civic eroding, dealers are pivoting to premium SUVs priced above $100,000, which appeal to Africa’s rising elite and offer higher returns. As one dealer noted, “It does not make financial sense to bring in smaller cars anymore. Only people who can pay for high-end vehicles are still in the market.” This aligns with the headline from Bassey-Duke, emphasizing how importers focus on luxury to sustain businesses amid weak demand for lower-end models.

Key impacts include:

• Reduced imports of affordable used cars (Tokunbo), with ports seeing “ghost town” activity and abandoned consignments.
• Price gouging, where some importers add N1–2 million markups, further inflating costs.
• Growth in premium imports, projected to rise as high-net-worth individuals drive demand.

Rise of Affordable Chinese Brands

Contrasting the high-end shift, the FX crisis has also propelled Chinese brands to dominate the new car market, overtaking Japanese and European rivals in affordability. Brands like Changan, GAC, Geely, Chery, and Jetour offer competitive pricing—e.g., Chery Tiggo 7 Pro Max at N29.4 million vs. Toyota Camry at N53 million—appealing to companies and governments. TIM Motors aims to replace 10-20% of used cars with new Chinese models, projecting new-car sales to hit 50,000 units annually within three years from under 15,000.

This trend is fueled by:

• Geopolitical factors, like U.S. tariffs redirecting Chinese exports to Africa (up 25% to $122 billion in H1 2025).
• Local investments in assembly plants and service centers, enhancing reliability.
• Shift from Tokunbo (over 90% of market), whose prices rose 30% since 2022.

Overall Market Trends in 2025

Despite challenges, vehicle imports surged 90% in H1 2025, with over 34,000 units at PTML alone (vs. 18,000 in H1 2024), thanks to CBN FX reforms and naira stability (closing at N1,500.91/$). However, the market shrank 18.4% overall in H1, with MG rising 60.6% to challenge Hyundai. Used car prices doubled under U.S. tariffs, affecting Nigeria’s reliance on American imports.

This dual dynamic—high-end focus amid cost pressures and affordable alternatives booming—illustrates Nigeria’s evolving car landscape, where economic stability could further boost growth.