Car imports rebound, hit N1tn in nine months

Nigeria's importation of passenger motor vehicles experienced a significant rebound in 2025, as relative stability in the foreign exchange market alleviated pressure on both dealers and buyers, according to foreign trade statistics from the National Bureau of Statistics.

Data from the NBS indicated that the value of passenger motor car imports surged to N1.01 trillion in the first nine months of 2025, compared to N894.09 billion recorded during the same period in 2024.

This marks an increase of N113.15 billion or 12.66 percent year-on-year, indicating a clear recovery following months of subdued demand caused by currency fluctuations and rising landing costs. A detailed analysis of the quarterly data reveals that the recovery gained momentum only in the latter half of the year.

In the first quarter of 2025, the value of passenger motor car imports was N224.58 billion, a decrease from N238.73 billion in the corresponding quarter of 2024. This represents a decline of N14.15 billion or approximately 5.9 percent, suggesting that importers were still facing challenges due to previous exchange rate instability.

South Africa followed with N25.84 billion worth of vehicles for goods transport, while imports from Angola and Liberia were minimal. In the second quarter, imports from the United States remained high at N99.18 billion, while South Africa accounted for N21.43 billion.

Liberia and Equatorial Guinea contributed smaller amounts, reflecting limited volumes in those categories. The increase became more evident in the third quarter. Used diesel vehicles exceeding 2,500cc imported from the United States alone were valued at N184.21 billion, nearly double the amount recorded in the first quarter.

Additional imports included N38.15 billion worth of used vehicles with engine capacities between 1,500cc and 2,500cc from the US market. The United Arab Emirates also emerged as a significant source, with imports valued at N13.67 billion, along with N12.68 billion worth of petrol engine vehicles imported in completely knocked down form.

Vehicles traced back to the United States were estimated to be worth approximately N415.05 billion during the first nine months of 2025, indicating that the US represented 41.21 percent of Nigeria's total passenger motor car imports for the reviewed period.

In a distant second place, South Africa's total imports were valued at N47.27 billion, accounting for 4.69 percent of the total imports during this timeframe. The United Arab Emirates made a significant appearance in the third quarter, with imports amounting to around N26.35 billion, which constituted 2.62 percent of the total import value over the nine months.

In summary, the data indicates that while passenger motor car imports in the first half of 2025 were N51.41 billion lower compared to the same period in 2024, the third quarter alone surpassed its 2024 counterpart by N164.56 billion. This shift accounts for the nine-month import value being higher by over N113 billion.

Insights from Analysts

Analysts suggest that these figures demonstrate a renewed confidence among importers, as the volatility of exchange rates has diminished and access to foreign currency has improved, despite the high prices of vehicles. The increase in vehicle imports aligns with trends observed in the foreign exchange market during the third quarter of 2025.

As per an economic and financial markets review conducted by FCSL Research, the naira exhibited a robust and stable performance in Q3 2025, appreciating by 3.2 percent to N1,480.66 per dollar, bolstered by enhanced dollar inflows, ongoing interventions from the Central Bank of Nigeria, and a $2.87 billion rise in external reserves to $42.23 billion, which collectively supported market confidence.

“Naira maintained a strong and stable performance in Q3 2025, appreciating by 3.2 per cent to N1,480.66/$ as improved dollar inflows, consistent CBN interventions, and a $2.87bn rise in external reserves to $42.23bn anchored market confidence,” the analysts at FCSL Research stated.

The report indicated that foreign exchange trading remained confined within a narrow range of N1,480 to N1,540 per dollar throughout the quarter, bolstered by strong oil revenues, the settlement of FX forwards, and renewed inflows from foreign portfolios, which it characterized as one of the most orderly quarters for the naira since the initiation of FX market reforms.

Looking forward, the analysts projected that the naira’s stability is likely to persist into the fourth quarter, supported by ongoing portfolio inflows, consistent oil earnings, and improved coordination between monetary and fiscal policies. However, they cautioned that slight volatility may still arise due to import cycles or fluctuations in global oil prices.

“The naira’s stability is expected to hold into Q4, supported by sustained portfolio inflows, steady oil earnings, and coordinated monetary-fiscal policy execution. However, mild volatility may surface around import cycles or global oil price swings,” the report read.

Analysts have projected that the naira would close the year within the 1,400.00-1,450.00/$ band on the back of moderating inflation. In a macroeconomic update titled ‘Moderating inflation bodes well for Nigeria’s currency valuation’, the analysts at CardinalStone Research anticipate that the deceleration in inflation will strengthen the national currency.

CardinalStone said, “The ongoing disinflationary trends bode well for currency valuation. Combined with a sustained current account surplus and a steady build-up in FX reserves, this is expected to underpin further naira appreciation. We project FX to close the year within the range of N1,400.00/$ – N1,450.00/$.

In September 2025, it was reported that the naira appreciated and remained below the 1,500/$ threshold for ten consecutive trading sessions in the official market, according to data from the Central Bank of Nigeria.

The domestic currency traded below the N1,500/$ threshold for the first time in over six months on September 15, closing at 1,497/$. Since that date, the naira has strengthened, concluding Friday’s trading at 1,480/$. In the parallel market, the currency also experienced positive sentiment, appreciating by 0.13 percent to an average of 1,510/$.

In its review of the naira's performance over the past week, AIICO Capital noted that improved liquidity from local participants, oil inflows, and offshore portfolio investors have contributed to the ongoing rally of the currency.

It asserted that the recent stability in the foreign exchange market is likely to be maintained in the near future, as the CBN continues to refine its policies in conjunction with fiscal measures from the FGN aimed at bolstering liquidity.

Cowry Asset Management Limited expressed similar views, stating, “Looking ahead, the naira is anticipated to remain relatively stable across markets, bolstered by stronger FX inflows, reserve accumulation, and ongoing interventions from the Central Bank of Nigeria.”

Previously, dealers and economists observed that the decline in car imports was not merely indicative of weak demand but also highlighted deeper structural challenges within Nigeria’s economy, including high inflation, increasing taxes, and restricted access to credit.

Nevertheless, as foreign exchange conditions become more predictable, there seems to be a resurgence in demand for foreign cars. An official from Ports & Terminal Multipurpose Limited, one of the busiest car-importing terminals in the country, attributed this increase in car imports to the stability of the exchange rate, which has allowed importers to plan more effectively.

“Unlike before, the exchange rate is now more predictable. Importers can plan ahead, inflation is slowing, and businesses are finding room to expand. This has encouraged more vehicle importation compared to the uncertainty that plagued the market in 2023 and 2024,” the source said in confidence due to a lack of authorisation to speak on the matter.

The PTML Chapter Chairman of the National Association of Government Approved Freight Forwarders, Mr Thomas Alor, also confirmed the increase. “There is a clear rise in vehicle importation this year compared to last year. While I cannot give an exact percentage, the volume of vehicles arriving at the ports has significantly grown,” he said.

Similarly, the Apapa Chapter Chairman of the National Council of Managing Directors of Licensed Customs Agents, Mr Abayomi Duyile, earlier said that the surge is noticeable. He attributed part of the growth to changes in the assessment of customs duties on vehicles.

“Last year, car clearance was slowed because duties were extremely high. The imputed values in the Customs system inflated costs. But with the introduction of the 846 valuation method, duties were reviewed downward. This has provided some relief for importers,” Duyile explained.

He further noted that customs now factor in depreciation, mileage, and wear-and-tear in valuing used vehicles, which has brought duties more in line with market realities.