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By Chinwendu Obienyi
Nigeria’s push to promote locally assembled vehicles is faltering as passenger car imports surged to N1 trillion ($689 million) in the first nine months of 2025, highlighting the economy’s continued reliance on foreign-made automobiles despite currency pressures and policy incentives.
Data from the National Bureau of Statistics (NBS) show passenger vehicle imports jumped sharply in the third quarter, reaching N527 billion more than double the N254 billion recorded in the same period a year earlier. The third-quarter figure accounted for more than half of total passenger car imports between January and September.
Between January and September 2025, total passenger car imports rose to N1 trillion, compared with N894 billion over the same period in 2024. In dollar terms, the nine-month figure translates to about $689 million, based on an average exchange rate of N1,450/$1.
Nigeria remains heavily dependent on foreign markets for vehicles, with the United States, Dubai and South Africa serving as the main import hubs. Used vehicles accounted for a substantial share of imports in the third quarter, valued at N234.7 billion of which N184 billion originated from the U.S., according to the NBS data.
While Nigeria has implemented policies aimed at encouraging domestic vehicle assembly, including import tariffs and fiscal incentives, local production has struggled to gain scale. As a result, the country continues to import the bulk of its passenger cars, leaving the sector highly exposed to exchange-rate volatility.
The surge in import values does not necessarily signal a sharp increase in vehicle volumes. Instead, analysts say the rise largely reflects exchange-rate pass-through, as naira depreciation raises the nominal value of imports even when demand growth is modest.
Quarterly data for 2025 point to a renewed acceleration. Passenger car imports rose from N254.6 billion in the first quarter to N224.5 billion in the second quarter, before climbing steeply in the third quarter. The Q3 figure represents the highest passenger vehicle import value for that period since at least 2020.
Historically, the largest quarterly import bill for passenger vehicles was recorded in Q2 2023, when imports surged to N809.6 billion following the removal of exchange-rate controls shortly after President Bola Tinubu assumed office. The policy shift triggered a sharp devaluation of the naira, rapidly repricing imports across multiple categories.
Although total passenger car imports moderated in 2024 to N1.2 trillion, down from a record N1.4 trillion in 2023, the renewed increase in 2025 suggests vehicle demand, driven by household purchases, commercial transport operators and ride-hailing fleets, has remained resilient despite rising prices and tighter financial conditions.
