New vehicle imports jumped by 45 per cent in the first 11 months of 2011 compared with the same period last year, as credit flows recovered after the banking sector reforms, vehicle importers said on Monday.Car sales in the countrys economy are a proxy measure for private purchasing power, a leading economic indicator that is not formally available in Nigeria.Reutersreported that port figures showed that new vehicle imports increased to 47,267 units in 11 months to November, from 32,634 units in the same period of last year, as bank credit started to trickle in.Figures by the Central Bank of Nigeria showed that bank credit to the private sector grew by 16 per cent at the end of October, compared with the same period a year ago, boosting demand for big-ticket purchases, including vehicles.Credit flows grew less than two per cent in 2010 as the banking sector crisis raged.Dealers said most consumers in the country relied on bank financing to purchase vehicles and estimated that the pent-up demand meant sales could increase by 20 per cent as credit recovered.New car imports had jumped by 40 per cent in the first nine months of 2011 compared to the same period last year, although importers had projected that sales were expected to slow due to rising interest rates and naira weakness.Port figures had showed in October that new vehicle imports increased to 36,773 in the first nine months to September from 26,113 in the same period of last year, when credit dried up in the wake of a deep banking crisis.Industry official said imports were ramped up on hopes that car demand would pick up in the second half of the year following relatively peaceful elections and ahead of the rescued banks completing recapitalisation deals.But credit has remained tight after the global economy slowed more than expected.We were expecting that the economy will improve in quarters two and three after the elections, which didnt happen. You now have naira weakness, interest rate hikes and low bank credits, all of which have created uncertainties and slowed sales, one dealer had told Reuters in October.The CBN had that month raised its benchmark interest rate by 275 basis points to 12 per cent, the sixth raise this year, worsening the credit outlook for consumers.The apex bank has been tightening its benchmark interest rate to curb inflation and bolster the currency, which it tries to maintain within a band to save the economy from higher import prices.However, none of the existing 12 vehicle assembly plants located in different parts of the country is currently producing above 10 per cent of their respective capacities though they have a combined capacity to produce 150,000 vehicles annually.Only PAN Nigeria Limited, Kaduna (formerly Peugeot Automobile Nigeria Limited), Steyr Nigeria Limited, Bauchi; and a new entrant, Innoson Vehicles Manufacturing Company, Nnewi; have attained 10 per cent production this year, while the others are rated between zero per cent and 7.5 per cent.
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