New vehicle imports into the country rose marginally in January and February compared to the same period last year, as dealers stuck with old inventory held back from placing new orders, CAR dealers said on Wednesday.
Port figures showed new vehicle imports rose to 8,072 units in January and February combined, up 1.5 percent on the same period of last year, according to vehicle importers.
The slower rise follows a 40 percent jump in car imports over 2011, port figures showed.
Vehicle imports soared 40 percent to 51,290 units in the twelve months to December 2011, partly as importers rose to meet demand from politicians on the campaign trail. Before polls, politicians often lavish huge party funds on cars for campaigning purposes or gifts.
Industry executives said imports slowed at the start of 2012 because dealers had ramped them up too much last year on hopes that demand would pick up following relatively peaceful national elections and a completion of the country’s banking reforms.
Credit to the real economy had started to recover after the banking crisis in 2009, in which nine banks had to be bailed out, caused it to dry up. Central bank figures show credit to the private sector in 2011 grew 4.61 percent.
But it was still short of 86 percent growth attained in 2008, shortly before a banking crisis.
Vehicle imports grew steadily to an annual peak of 75,000 units by the end of 2008, almost double the level of two years earlier, as banks offered credit aggressively to a growing middle class for everything from refrigerators to equities.
But car imports went into a steady decline after the banking crisis, falling 40 percent in 2009 when credit dried up in the wake of a $4 billion bailout of nine lenders by the central bank. It also fell 18 percent in 2010.
In 2008, credit sales had accounted for about 22 percent of all vehicle sales in Nigeria, but that percentage dropped nearly to zero after the 2009 bank bailout and has since been struggling to recover.
The sale of vehicle are a proxy measure for private purchasing power, a leading economic indicator which is not formally available and can give insights into GDP growth that are not always captured in official figures.