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Toyota, Honda, Ford, other brands lose ground as GAC surges in Nigerian market 

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Toyota, Honda, Ford, other brands lose ground as GAC surges in Nigerian market 

A new entrant into the Nigerian automobile market, GAC Motors, is challenging the dominance of  Toyota, Honda, Ford and other big Japanese, European and American automobile brands in the country, Business Hallmark’s findings have revealed.

Chinese vehicles, especially GAC brands, are becoming pronounced on Nigerian roads, most particularly, in Lagos, which is now its biggest market.

Nigeria’s automobile industry had in the last one decade recorded 400 per cent rise in prices of vehicles, while volume of sales declined 80 per cent.

According to available records, a total of 42,166 new vehicles were sold in Nigeria between 2017 to 2020, far less than one-year sales volume in 2000.

Further breakdown of the data shows that only 9,000 vehicles were sold in 2017, 11,500 sold in 2018 and 12,836 vehicles were sold in 2019 and 8,830 in 2020. The figures of 2021, 2022 and 2023 are not yet out are expected to further decline.

BH investigations show that prices of American, Japanese, European and Korean models, such as Ford, Toyota and Honda, Audi, as well as Kia and Hyundai have gone up astronomically, compared to their rates years ago.

As a result, Chinese brands have become the main beneficiaries. They are penetrating the market with less difficulty due to low prices, brand aesthetics and other features.

According to BH findings, more Nigerians are now purchasing Chinese GAC models known for their competitive prices and fuel efficiency.

GAC Motors rapid expansion in the country is being helped by the biting economic crisis in the country, which is forcing buyers, including governments, businesses and individuals to look for durable and cheaper vehicles.

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A BH survey of prices of brand new cars conducted in late October showed that while a unit of 2023 Toyota Camry (full option) cost N80,015m; 2022 Toyota Corolla N52,015,000; Honda CR-V 2023 Black N68m; Honda Accord 2023 Gray N68m; 2023 Ford Explorer Hybrid Limited; N88,496,220; 2023 Ford Escape Plug in Hybrid N63,024m; 2023 GAC GS4 N37million and 2023 GAC GS3 N29.3million.

According to a survey conducted by BH, four out of every 10 brand new vehicles on Lagos roads are GAC brands, with the Lagos State government directly or indirectly owning 45 percent of the vehicles.

For instance, the Lagos State government-financed LagRide scheme exclusively uses the GAC GS3 SUV and GA4 Saloon cars.

Launched in 2022 with 1,000 brand-new cars and mini SUVs, the LagRide initiative currently has over 3,000 vehicles in its fleet, with another 3,000 units expected by the end of the year.

Apart from that, the state government on a yearly basis purchase and distribute GAC vehicles to senior workers on GL-17, who still have two years left in service.

In July 2024, the Lagos State government distributed over 200 personalized GAC GS3 and GS4 to some of its directors on Level 17.

Speaking on the surge in the numbers of GAC vehicles on Nigerian roads, a Lagos lawyer, Barrister Segun Ilori, said the introduction of the Chinese vehicles into the country has greatly reduced the dependence on second-hand vehicles imported from overseas.

“I recently purchased six units of GAC 3 cars for my senior staff. We initially planned buying Toyota RAV4, but had to jettison the idea when the dealers we contacted gave us between N78 million to N86 million price range depending on the specifications.

“At a stage, we considered buying Tokunbo (fairly used) brands of RAV4 in order to reduce cost. They also did not come cheap as 2020 models  were offered to us for between N28 million and N42 million depending on the year of production, mileage and condition.

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“However, in the process of finalizing the deal and making payment, the dealer came to my office in a brand new GAC GS3, which I really admired.

“I asked him how much it cost and was dumbfounded, when he told me he got it for only N19.82 million in December 2022. I quickly bounced the idea of going for GAC GS3 vehicles off intended beneficiaries, who all subscribed to the idea.

“However, by the time we made payment, the price of one unit has gone up to N23.37 million, giving us N140.22 million. But it’s still a good deal compared to the over N500 million we would have coughed out for the six units of RAV4 we intended buying earlier.

“Since the vehicles were delivered in November 2023, we’ve not had any problem whatsoever with any of them”, the lawyer stated.

Founded by Guangzhou Automobile Group Motor Co., Ltd.) in 2008, a Chinese automobile manufacturing company, which focuses on making complete vehicles, auto parts and their trading, GAC’s journey into the Nigerian market began in November 2019, when the Lagos State governor, Babajide Sanwo-Olu, who was just barely five months in office, made a business trip to China, where he met with the Chinese investors’ community.

Some of the bilateral agreements reached at the business meetings held in the city of Guangzhou included the establishment of an automobile company, CIG Motors, in Lagos, Nigeria, to be co-owned by Lagos State and the Chinese company on a 50-50 basis.

The two parties also signed a Memorandum of Understanding (MoU) for the establishment of a new car assembly plant on WEMPCO Road, Ogba, Lagos, that will be jointly run by the state government and CIG Motors to produce different classes of brand-new cars.

Approval for the new plant was given by government in July 2021, while construction works began in October 2021.

After about four and half years of painstaking toiling, the first phase of the CIG car assembly plant in Ogba was commissioned on Tuesday, October 24, 2023 with a production capacity of 5,000 vehicles per year.

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Though the automobile production line covers only 4,800 square meters, the plant’s total area covers 35,000 square meters, leaving room for further expansion.

While speaking at the inauguration of the new GIC Motors assembly plant in October 24, 2023, Governor Sanwo-Olu said apart from crashing the cost of brand-new vehicles in local markets and reducing dependence on second-hand vehicles imported from overseas, GAC vehicles were designed for comfort and easy maintenance.

“They are durable, well suited to our roads and climate”, Sanwo-Olu had assured.