By Theodore Opara
The Managing Director of Toyota Nigeria Limited, Mr. Kunle Ade-Ojo has described the year as very tough for automobile business in the country.
Mr. Ade-Ojo who was speaking during their fourth quarter press forum in Lagos lamented that prices of brand new vehicles had doubled and sales dropped due to the high, exchange rate and scarcity of foreign exchange.
Despite this, he said his company had resisted the temptation of retrenching their staff and had as far as administrative is concerned, reduced cost to about 40 per cent because business is not as it used to be. Also we are more cost effective in some marketing activities and thinking of how to maximise profit without spending as much as we used to do in the past.
The Managing Director who won the Managing Director of the year award for 2016 by the Nigeria Auto Journalists said. ‘’ In spite of this, we all have to continue to re-invent ourselves so that one can remain relevant. If you don’t look ahead, you get left behind. So, it’s been a tough year for us but at the same time, we are grateful to God that we are doing well. Toyota Nigeria Limited has a strong foundation which we keep on strengthening for us to weather the storm”.
The Toyota Nigeria Managing Director further revealed ‘’The foreign exchange threw a major challenge to everybody and as a result of that when we compare the imports this year with that of last year as far as brand new vehicles are concerned, there has been a drop of almost 60% from between January and September this year. Last year, the whole market brought in about 15,000 and this year, it has reduced to 6,000 which is a major decline as far as importation is concerned.
Continuing, he explained, ‘’looking at forecast for the year as far as retail sales are concerned, the market is also going to drop to about 50% . Like I was saying, last year total sales were about 32,000 vehicles for retail last year. This year, we are forecasting maximum of about 16,000. So’ it’s gone down. Last year was about 7,000vehicles while we are forecasting about 4,000 vehicles this year.
So, almost about the same drop. The drop would have been more but at the end of the year, companies have vehicles that they carry over usually into the following year. That is why retail sales are not as bad as what had been brought.
Looking into next year, he said that the foreign exchange problem will continue to impact on prices of vehicles. Between January and now, the price of vehicles have more or less doubled from what it used to be. At the end of last year, most vehicles we were selling have doubled because of foreign exchange issues and in some instances, some of us had to cut our losses by having to go into the black market. That also has major impact as far as prices of goods are concerned.
Govt revenue remains, very tight and you know that government and corporate organizations are the main buyers of brand new vehicles in the country. So, when the govt is cash strapped and businesses are closing down and not generating enough cash to run businesses, then, that naturally also has an affect on business.