How to Start a Vehicle Import Business in Nigeria

Buying and selling cars is a thriving business in Nigeria. The country is import dependant to fill the needs of auto enthusiast.
The country has one or two assembly plants with low turnout of vehicles. The business thrives because an average middle-class home in Nigeria has at least one car.
And those in high-brow areas keep many vehicles. Other reasons for the proliferation of vehicles include poor road transportation, no rail system or alternate means of mobility.
If you are interested in importing vehicle you need hard cash. The average cost of an import is about N2 million so adequate preparation is necessary. Other challenges include clearing duties and selling the vehicle.
Why is Imported Cars Popular?
The popularity of imported cars is because of the price. The cars are almost new and better maintained that locally used ones. They come with fewer faults and handle better than locally used vehicles. Another reason is the high cost of new vehicles in the country.
cars
What are the Popular Brands?
Before committing huge funds it is good to know the popular brands. Popular brands occupy 2/3 of the market and sales.
You need to organize a survey and conduct a feasibility study. The study should focus on popular brands, prices and supply. Top brands in Nigeria are Toyota, Honda and Mercedes Benz.
  • Toyota
  • Honda
  • Mercedes Benz.
Sourcing the Product
There are many ways to purchase used vehicles abroad. The source should be reliable and consistent. Ways to buy the vehicles are through a trusted friend or relation. Others include online purchase through car dealer’s websites, auto shows and auction sites.
  • trusted friend or relation
  • car dealer’s websites
  • auto shows
  • auction sites
Cost of Importation
The interesting thing about buying a car abroad is the cheap costs. Car dealers find steady deals on used vehicles abroad at very low prices.
The price starts to escalate with shipping costs and clearing costs. The total costs are purchase of the vehicle, shipping the vehicle, clearing and custom duties.
There is an age range for vehicles allowed in our ports. Make sure the vehicle you purchase falls within the range.
You could use the shipping agent to clear the vehicle or hire a clearing agent in Nigeria. You might also incur delivery cost from port to home. The import duties for vehicles in Nigeria are high.
Inspection
Every vehicle is subjected to destination inspection. There are different forms such as the e-Form M and others.
To acquire the e-Form M you need tax identification number and tax clearance certificate. Other documentation is valid email address, business name and certificate of incorporation.
You also need an auto dealer’s bank to process the form. The bank presses the form and a letter of credit is subsequently issued. The bank also sends import documentation such as the combined certificate of value, bill of lading.
Once the Nigerian custom accepts the form you notify your supplier to start the shipping process. The next step is to get a SONCAP certification and apply for pre arrival assessment report.
Other documents are the risk assessment report. You can get the pre-arrival assessment report online.
Importation Options
There are three importation options available to auto dealers. They can use the services of Nigerian import shipping company. Other options are shipping directly from auto dealers abroad or through foreign agents.
  • Nigerian import shipping company
  • ship directly from auto dealers abroad
  • through foreign agents
Payment Options
Since you are dealing with foreign currency you need a reliable payment option. You could use electronic fund transfer or an escrow account.
Other ways include letter of credit, debit or credit card payment. A letter of credit is the safest method when dealing with strangers.
  • electronic fund transfer
  • escrow account
  • letter of credit
  • debit or credit card payment
Clearing Procedure
The agent handles the clearing procedures. However knowing the stages is beneficial to the importer.
It starts by an import cargo notification, filling an SGD declaration form. Next is the free on board charges, bill of entry. The importer gets a good release form from shipper. The next is TDO then import exit pass.
Documents to Bank
After clearing you send risk assessment report, single goods declaration and combined certificate of value. Other documentation is parking list, import duty payment receipt shippers certificate (copy) and manufacturer’s certificate (copy).
Selling the Vehicle
Many small importers try to get buyers before importing the vehicle. This is to reduce costs on security, display or advertisement. They tend to make huge earning because of the high costs added on the vehicle. The best strategy is to earn reasonably and restock inventory.

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