Developing countries provide an opportunity for new businesses to offer their services in various sectors of the emerging economy. One of such sectors is the automobile industry.
Unfortunately, some of those countries do not have an automobile industry as developed as their more advanced counterparts. This is due to a myriad of reasons, one being a lack of sufficient numbers of assembly plants. Major brands don’t always have a manufacturing presence; thus, automobile dealers in such nations rely on imports.
The cost of imports
The huge gap in buying power between the currencies of developing nations and more developed nations further perpetuates the hike in price. And because these countries do not generally offer credit facilities that are as robust as those of more developed countries, owning a new automobile becomes more of a challenge.
Also, import costs and taxes, as well as the conditions imposed by foreign manufacturers may result in a more challenging and costly experience for new automobile buyers. This, however, presents an opportunity for the used car sub-sector.
Used cars dominate the automobile industry in countries like Nigeria, mainly because of their reduced prices. They are cheaper to buy and come without all the extra costs synonymous with new cars.
Participating in online dealer auto auctions
In Nigeria’s present economy, getting the best out of the automobile industry, both as a buyer and seller, involves operating in the used car sector. Auto Dealers in Nigeria will require access to international auctions and dealers of quality used cars. Many of these auctioneers do not cater to the Nigerian market— hence the high prices of acquisition and importation. However, some auction sites have set their sights on the Nigerian market and have extended their services to dealers in this region.
One of these businesses is Auto Auction mall, which now holds online car auctions in Nigeria, where they auction high-quality used cars from US-only dealers to dealers in the Nigerian market. A good number of these US-only dealer auctions are generally closed to dealers outside the US but some forward thinking auction services have found a way to make them legally available.
Local dealers can participate in auction held at various lots in the US and have their vehicles shipped down to Nigeria. There are many benefits to buying at auctions over buying from traditional dealers. Also, dealer auctions— auctions that sell used cars to other dealers— offer models at reduced prices.
To participate in online auctions, you have to register on an auction site and deposit some funds to acquire “bidding power”. You may also need to submit some credit card information to ensure you have the funds to finance your purchase— should you win.
You usually have a lot of options (numbering in the thousands for some sites), that you can choose from. But before bidding for a car, you need to carry out some checks. Unfortunately, because you’ll be bidding online, you won’t be able to inspect the car physically beforehand. However, you can do your due diligence by checking the car’s vehicle history report. This report tells you if the vehicle was involved in a crash, if it has had any of its any parts replaced, how many previous owners it has had, and other useful information. The vehicle history report can be gotten from sites like Carfax.
Once you are sure of the make and model, start bidding. Be sure not to overshoot your budget when bidding.
Shipping is an important part of importation and it cannot be overlooked or left unplanned for. Cars bought can be shipped from California, Savannah, New Jersey, Texas, Miami, Florida, Georgia, Houston, and other major cities to Tin Can Island or Apapa Port in Nigeria.
While the efforts of sites like Auto Auction mall and others who extend their services to Nigeria help lessen the burden of importation, the fact remains that the industry could still use a lot of improvements. However, used car sales still remain the best way to get the best out of the automobile industry in Nigeria.