Step-wise format on How To Start Importing Cars To Sell in Nigeria
JEROME MICHAEL EBRUPHIYO
Thursday, July 8, 2021
Business
The Nigerian economy mostly thrives on imported cars due to the fact that cars are not being manufactured in the country. Hence, the market for imported cars is very large, as is the profitability of the business because Nigeria has a large population, increasing middle class with purchasing power to acquire new vehicles. In this article, we are going to provide answers to some certain quetions related to importing and selling of cars in Nigeria, some of which are; How much capital do you need to start the business, the advantages of the business, the profits involved, the risks, how to get potential customers, most loved brand of cars in Nigeria, How much is import duty on cars in Nigeria? How is Nigeria Customs duty calculated? etc.
This business is not as capital intensive as it appears. So many big car dealers out there started with just one car. For as little as N1,000,000 you can start importing second-hand cars.
The major advantage of this business is that the market for cars is very good in Nigeria. Reasons are that:
So many Nigerians want to have control over their transportation needs
So many businessmen and women need cars these days to be able to carry out business transactions with ease
The desire to belong to a certain social class by most people
For networking purposes
This business is definitely lucrative and highly profitable for those who have interest in venturing into it. You only need to be able to manage the costs and taxes well. But on the whole, your profit margin per car should range from N100000 – N250,000 or more. To maximize your profits and avoid extra costs, always make sure you already have buyers on ground before the importation process.
The major risk involved in this business is vandalism and sabotage of your goods.
To start sourcing for customers, you have to first run a market survey.
Market survey
Your market research/survey should give you an idea of who your target customers are, what type of cars they like, their spending power, etc. Once you have been able to determine this, your next focus should be on reaching them. And that’s where good marketing strategies come in handy
Start by immediately listing the cars online for sale
There are tons of e-commerce websites you can list your cars on including, jiji.com, olx.com and so many others
Here’s a list of most loved brands of cars in Nigeria:
Mercedes Benz
Honda baby boy
Range Rover sports
Ford
Toyota sienna
Toyota Camry
Big daddy
And so many others
A quick market survey should provide you with a comprehensive list of fast selling cars in Nigeria.
As a newbie, you should probably source for cheaper options for purchasing your cars. Do your research. Buy direct from online car dealers websites. Use Auto auctions, eBay car deal auctions, Yahoo Autos and many others. Find our exactly how much it will cost you to buy and ship the cars to Nigeria.
Here are the costs you should expect when importing cars from abroad into Nigeria:
Auction fee if you bought through auctioning
Shipping costs
Clearing and port charges
Customs duty, custom levy, and VAT
Commission payable to shipping and clearing agents
Charges to be paid to shipping company at delivery point
Miscellaneous expenses
There are mandatory requirements for importing cars into Nigeria for sale. This section will walk you through what you need to do in order to qualify as a car importer in Nigeria.
Have a car dealership license
To fully lauch yourself in this business, you need to apply for and pay for a car dealership license. Payment of a license fee certifies you as an authentic car dealer. This is a crucial step in fully establishing your business, plus it comes with many perks. Majority of bidding sites only accept authenticated dealers to their site. You can even start selling only a particular brand of car by becoming a franchise, and so many other perks
Ready your documents
For you to be able to import your cars, certain requirements need to be met, including the following documents which you need to have
Completed Form ‘M’ submitted to authorized dealer bank with the following information:
Description of goods
Port destination
Shipment identification
Date of shipment
Country of origin
Country of supply
Packing list
Bill of lading/airway bill/roadway bill
SONCAP certificate
Manufacturer’s certificate of production
Local insurance
There are tons of options available for buying cars.
You could visit Auto auction sites and bidding sites open to you as a certified car dealer. Check out sites like auctionexport.com ridesafely.com autobidmaster.com and so many others.You get to buy cheaper cars on Auction sites than most other sites
Another option is going to Benin Republic to buy your cars. You will buy and drive the car all the way to Lagos. In this case, you will have to hire drivers to bring them for you
Another option involves franchising for a particular car manufacturer or dealer. With franchising, you get to sell only cars from that company. The franchising company will handle all logistics for your business; you are only required to just keep selling and making more orders
The secure payment options available are wire transfers, credit or debit card from your bank to the seller’s bank, letter of credit, and others. The letter of credit is, however, the most secure method. Here, the importer pays for the car to the authorized dealer bank, for transfer to its correspondent bank in the seller’s country. The correspondent bank will then credit the seller’s bank with this money, only if the seller performs his/her own part of the deal in accordance with the terms in the letter of credit.
The Nigerian Customs receive duty for the importation of cars, these duties vary by the size, capacity, and the year of manufacture of the car. Used vehicles will pay 35% duty while newer cars from 2016 will attract a levy charge of 35%, duty 35% which totals 70%.
In order to get your CIF, simply add the cost of the items imported, the insurance value (0.5% of FOB), and the cost of transportation, which is Freight. VAT = 7.5% x (CIF + ID + Surcharge + CISS + ETLS). Where; Surface Duty (ID): This is often commonly referred to as import duty.
Like(0) |
|
Views(537)