US Dominates N1tn Auto Market

Nigeria’s importation of passenger motor cars witnessed a strong rebound in 2025.

This resurgence was largely driven by relative stability in the foreign exchange market, which eased pressure on dealers and buyers.

According to foreign trade statistics from the National Bureau of Statistics (NBS), the value of car imports rose to N1.01tn in the first nine months of 2025. This represents a significant increase from the N894.09bn recorded during the same period in 2024.

This marks an increase of N113.15bn, or 12.66 percent year-on-year. The data signals a clear turnaround after months of weak demand caused by currency volatility and rising landing costs.

A Tale of Two Halves

A closer look at the quarterly breakdown reveals that the recovery gathered momentum only in the second half of the year.

• Q1 2025: Imports fell by 5.9 percent to N224.58bn, as importers continued to grapple with exchange rate instability.
• Q2 2025: The downward trend persisted, with imports contracting by 12.8 percent to N254.67bn.
• Q3 2025: The trend reversed sharply. Imports jumped by 45.3 percent to N527.98bn, effectively offsetting the declines recorded in the first half of the year.

US Dominates Supply

Country-level data highlights the United States as the dominant source of vehicles.

• The US accounted for 41.21 percent of Nigeria’s total passenger car imports in the first nine months, valued at approximately N415.05bn.
• In the third quarter alone, imports of used diesel vehicles (above 2,500cc) from the US nearly doubled to N184.21bn.

South Africa followed at a distance, contributing 4.69 percent of total imports, while the United Arab Emirates emerged as a key source in the third quarter.

The FX Factor

Analysts attribute the surge in imports directly to developments in the foreign exchange market.

According to a review by FCSL Research, the naira appreciated by 3.2 percent to N1,480.66/$ in the third quarter of 2025. Improved dollar inflows, sustained Central Bank interventions, and a $2.87bn rise in external reserves helped anchor market confidence.

“Unlike before, the exchange rate is now more predictable. Importers can plan ahead, inflation is slowing, and businesses are finding room to expand,” an official at Ports & Terminal Multipurpose Limited stated.

Customs Reforms Boost Activity

Industry stakeholders also credit policy changes for the renewed activity. Mr. Abayomi Duyile, Apapa Chapter Chairman of the National Council of Managing Directors of Licensed Customs Agents, noted that the introduction of the 846 valuation method has provided relief.

“Last year, car clearance was slowed because duties were extremely high… But with the introduction of the 846 valuation method, duties were reviewed downward,” Duyile explained. He added that Customs now factor in depreciation and mileage, bringing duties closer to market realities.

Outlook

Looking ahead, analysts expect the naira’s stability to hold into the fourth quarter. CardinalStone Research projects that the currency will close the year within the N1,400/$ – N1,450/$ band, supported by moderating inflation and steady oil earnings.

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