Nigeria Increases Tariff On Tyre Imports

The West African nation incurs heavy losses to the exchequer as a result of lower import duties on tyres

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Nigerian government has increased tariffs on all tyre imports into Nigeria to 40 per cent from the current rate of 10 per cent. Goverment hopes that the measure would revitalise the ailing tyre manufacturing industry, increase employment as well stem the exodus of many tyre industries to neighbouring countries.

A few years back, the Nigerian government had reduced duties on the import of tyres that led to losses for the tyre manufacturers based in Nigeria. Many relocated to neighbouring countries to avoid the competition they faced from tyre imports from places like Dubai, India, the Far East and China.

According to official sources, the local production of tyres was 2.25 million units while imports accounted for about 0.75 million units before the policy was implemented. The lowering of duties on tyres had an adverse effect on tyre companies in Nigeria. For instance, the only remaining tyre manufacturing company in Nigeria, Dunlop, witnessed a sizeable decline in turnover from $3.4 billion to US$226 million and recorded net loss in excess of $133 million.

As per available statistics, the tyre market in Nigeria is approximately 3 million units, including tyres for cars and trucks. According to recent studies the Nigeria tyre market is expected to surpass $750 million by 2025.

It is believed that the lowering of import duties of tyres had a very negative impact on the Nigerian economy, including loss of employment for as many as 30,000 people in Delta, Edo and Ogun States; loss of foreign exchange of approximately $650 million on importing; and smuggling of over nearly 2.5 millioin units of tyres at an average price of $250 per unit.

The global tyre market is estimated to be $190 billion while the tyre market in Nigeria is about $1.0 billion. The total Nigerian tyre market size is estimated to be 5.7 million units (car, van & light truck – 3.9m and truck – 1.8m) with a projected growth rate of 3-5% annually).

The Nigerian market has become the most sought after for international tyre manufacturers on the continent because of its huge market potential. However, the high cost of new tires and low purchasing power of consumers, caused by the recent economic contraction due to COVID-19, has impacted negatively on the volume of sales.

Till recently, there were a few locally established tyre manufacturers in Nigeria, but erratic power supply problems in the country forced most of these tyre manufacturers to relocate to neighbouring countries. This, in turn, created a thriving market for foreign brands looking to sell tyres to Nigerian buyers.

According to recent reports, the tyre market in Nigeria is dominated by the passenger car tyre segment, and this trend is expected to continue over the next five years.

Demand for Tyres in Nigeria

Majority of the motor vehicles entering the Nigerian automotive market are used vehicles from Europe and U.S.A. and thus, the Nigerian tire market is driven by the demand for replacement tires. Two-wheeler tires captured majority of the volume share in the Nigeria tire market due to high popularity of the two wheelers in the country and a shorter life of two-wheeler tires when compared to tires in other segments. However, truck and buses tire segment had the highest revenue share owing to higher prices and prominent use of commercial and public transport by the Nigerians.

Based on types, radial tyres dominated the Nigeria tire market due to certain advantages such as higher fuel-efficiency and longer life offered by them. Some of the key players in Nigeria tire market are Goodyear, Pirelli, Continental, Bridgestone, Michelin and Chinese players.

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Africa Tyres Dealers Directory: Database of Tyre Importers in Africa

In a bid to help tyre manufacturers and suppliers help find importers, wholesalers, dealers and agents in Africa, the African Business Pages has compiled a special directory that lists tyre importers in over 24 African countries. The Africa Tyre Dealers Directory is now available as a a digital download at a nominal price and has played an instrumental role in promoting direct B2B contact between African tyre importers and tyre manufacturers and suppliers from all across the world.

The Africa Tyre Dealers Directory has been adapted for online distribution and is now available in Excel format as an instant digital download from Africa Business Pages. The Africa Tyre Dealers Directory has served as a useful database for those wanting to export tyres to Africa and to reach potential buyers in Africa. You can download the directory HERE.

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