THE CABLE
Nigeria is grappling with significant economic challenges, including high inflation and the depreciation of the naira. The weakening of the currency has led to higher costs for imported goods and raw materials, which squeezes business profit margins. Many companies pass these increased costs onto consumers to maintain profitability, fueling inflation and eroding purchasing power.
In this interview, TheCable’s ADERONKE ONI spoke with Kelvin Lawson, a car dealer and chief executive officer (CEO) of Nicakelv International Limited, about the challenges in the industry, particularly how fluctuation in the foreign exchange (FX) rate is affecting the auto industry.
TheCable: The FX rate has greatly affected Nigerians. How has it affected you specifically in business?
Lawson: The dollar is the driving force of this business because we buy in dollars and we sell in naira. Looking at the economy generally, everything has been going in an upward trend. The way inflation is, it is catapulting almost every month. The dollar is going up almost monthly, if not weekly, and the higher the dollar, the higher the sales and the higher the purchases. So, it has affected me very badly, in the sense that before this dollar/naira thing, the same amount you used to buy two cars two years ago is not enough to buy the same car now. That is how bad it is. It’s not just in the car business; it is the general economy. It is crashing down.
For instance, three years ago, Corolla, the popular car used for car-hailing, we were selling for like N3 million, N3.5 million. Last year, it came to N4 million, N5 million. That same Corolla is selling for N8 million now. In some cases, N9 million. Camry 07, 08, I’ve sold them for N2 million plus here, N3 million, and it started going up. That same Camry 08, 09 is selling for N11 million, N12 million.
The economy is affecting car dealers and importers very seriously. What does that mean? It means that importers that could bring in three or four cars before can barely bring in one with the same amount. As it is affecting us here locally, it’s affecting us at the buying points in America because the price has actually shot up. The dollar is affecting everything. I bought it last week at N1,672.
How do you equate that with what we are doing? It’s serious; it’s limiting the flow of funds; it’s limiting the flow of the vehicles that we buy. It’s also affecting greatly the people patronising us. How many people have the strength to buy cars now? So you see that people have diverted from buying tokunbo cars to registered cars.
The same amount you would have used to buy an imported, fairly used Camry two years ago, you can’t use that amount to buy a registered Nigerian-driven Camry now. It’s not a joke.
TheCable: How have you been sustaining the business since people’s purchasing power has reduced?
Lawson: We pride ourselves in the fact that we are doing this business. We don’t have another one for now. We have learned to have a thick skin to remain in business because the buying power has really come down. It’s crashing by the day. We come here almost every day, spend what we have sold, what we have. Not like before, when you come, you have the mind that in two weeks, in one week, you make a sale. Most of us come here, and for six months, no sales.
The buying power has reduced tremendously. People come these days to window shop just to know how much it is and to fuel their dreams and hopes. So, buying power is not something to write home about. But how do we stay? It’s another thing. This is our farm, and we are like farmers; where else do you go when you have this to hold on to? So, we are just having thick skin, believing in hope, which is what Nigerians are dwelling on, that maybe tomorrow, things might be better.
READ THE FULL INTERVIEW IN THE CABLE
