Nigerian auto sales steady.

The market research publisher Business Monitor International (BMI) released a report on the Nigerian automotive sector on May 10, 2007.

Among the report's conclusions were the fact that automotive sales would track the progress--or lack of it--in the Nigerian economy. BMI said, "We see investor confidence and a growing consumer class continuing to drive growth, and we are forecasting a very good year in 2007." BMI forecasts GDP growth at 5.9 percent for 2007. The International Monetary Fund's April 2007 forecast for Nigeria's 2007 GDP is growth of 8.2 percent. For 2008, the IMF sees growth slackening to 6.7 percent.

Nigerian inflation is high. The IMF's forecast for an increase in the rate of inflation for 2007 is 7.9 percent. For 2008, the IMF expects the rate of inflation to increase another 9.1 percent.

BMI says that Nigeria's financial sector is improving its efficiency. This will promote strong growth in the country's non-oil sectors, which are admittedly growing from a small base.

Automotive sales, therefore, will increase approximately 3.6 percent in 2007. BMI estimates that 43,505 units will be sold. By 2011, because of a slowing of GDP growth, automotive sales are likely to decline to 37,025 units.

The Nigerian government has taken a protectionist stance in regard to the country's newly privatized automotive industry. The government buys vehicles from local manufacturers, which are experiencing stagnant sales of late. The government also has a loan program in place for government employees who want to buy a new car. Employees must buy the cars from local manufacturers.

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