Nigeria new car imports increase by 40%

Nigeria's new car imports jumped 40 per cent in the first nine months of 2011 compared to the same period last year, although sales were expected to slow given rising interest rates and local currency weaknesses, import dealers said on Monday.Car sales in the Africa's most populous nation are a proxy measure for private purchasing power, a leading economic indicator which is not formally available. Nigerian port figures showed 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, according vehicle importers.Industry official said imports were ramped up on hopes car demand would pick up in the second half of the year following relatively peaceful elections and ahead of rescued banks completing recapitalisation deals.But credit has remained tight after the global economy slowed more than expected, prompting higher interest rates and a weaker naira.'We were expecting that the economy will improve in quarter two and three after the elections which didn't happen. You now have naira weakness, interest rate hikes and low bank credits all of which have created uncertainties and slowed sales,' one dealer told Reuters asking not to be named.The naira currency poses a major obstacle to importers, dealers said, after it weakened to all time low of 164.75 against the U.S. dollar last week prompting severe tightening measures by the central bank.The central bank raising its benchmark interest rate by 275 basis points to 12 per cent, the sixth raise this year, worsening the credit outlook for consumers.
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