Tokunbo Cars and the Impending disaster … www.drops.ng

Please note, this writeup might have a lot of pessimism but there’s no way to downplay it without lying.

Last year, i told importers on my feed to stop focusing on 2003-2010 cars, Toyota and other Japanese models as profitable rides. Getting those cars on auction sites was like a tumble in the wilderness. You’re competing with regular naija dealer, middle east dealers and even Americans to purchase. The higher the demand, the shorter the supply. This was before dollar wahala and increased charges to ship and clear..

At this point, we are at breaking point. I dare to say this that No Serious Dealer paying 3m plus per year for a car lot will be bringing in multitude of cars below 5m. It’s unrealistic because getting dollars at even 520/1usd is hard, those 03-2010 vehicles are already obsolete in the US because they ve been out of production for years so there’s no supply on them.

Let me move to cars of 2012-2019.

1. Due to Covid 19 hitting last year, there was/is a global semiconductor shortage. Chips production is usually divided between personal electronics and cars but last year, there was a higher demand on personal electronics and car chip quota reduced.

Without said chips, a lot of car manufacturers did not hit the target for brand new vehicles.

2. Due to Covid 19, a lot of Americans income dropped so demand for new cars dropped since most people decided to go for Tokunbo.

These 2 factors have caused US Tokunbo cars to increase by 32-40%. And Nigeria is heavily dependent on Tokunbo cars.

Long story, abi.

If you had a budget for a car, revise it by 35% because the streets aren’t smiling. Right now, you could go to a dealership now expecting the same since last year and they won’t look at you twice or even ask you to come back. Once you can’t meet their cost price plus small price, they won’t sell because they know that getting inventory to replace it is very hard.

My suggestion, if you’re buying cars under 15m, close your eyes, take a loan and move on. That 2 months of waiting is a gamble, your choice car could increase in price.

Random picture of Didi and parents just fooling round in an eatery .

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