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Technology as Disruptive Tool for Used Car Market

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  • Technology as Disruptive Tool for Used Car Market

Just as the advancement in new technologies is disrupting many businesses across various sectors of the economy, technology is also fast becoming a major influencer of the already thriving used car market in Nigeria, writes Emma Okonji.

Global technology evolution is gradually defining how businesses are run and at the same time setting the pace for business growth and development. The recent global technology disruption is helping businesses to automate office functions such as record keeping, accounting and payroll. Business owners are now using technology to create secure environments for maintaining sensitive business or consumer information. With technology, business owners can create positive disruptions that will rake in more money into the business and at the same time meet customers’ demands. Such is the case with Nigeria’s auto business, where Nigeria spends an estimated N1.2 trillion on importation of vehicles, according to recent statistics.

Another statistics released recently by PricewaterhouseCoopers (PwC), Nigeria’s professional services firm, which highlighted the huge spend on vehicles importation into the country, mentioned that more than 70 per cent of imported vehicles are used ones, also known as ‘Tokunbo Cars’. This trend has created a thriving used-car market, spurred more by Nigeria’s new automotive policy, a development that saw car import tariff hiked by 35 per cent.

Over the past five years, technology has proven handy in playing a vital role in the success of the used-car market. Specifically, technology is being used to create online marketplaces, curating inventories of used-cars and connecting buyers with sellers.

Impact of technology

Technology has impacted so much on businesses, including the auto business in Nigeria, where the sales of Tokunbo cars thrives.

“In today’s auto business, whether you are selling brand new cars or Tokunbo, you cannot succeed without technology. Technology for dealers has become a very vital tool, more important than even a car dealer shop,” said Lukmon Oloidi who is a used-car dealer in Lagos.

According to him, technology has made it easy for dealers to show their inventories to people outside the main cities of Lagos, Abuja, Port Harcourt and Kaduna and even to some cities in neighboring countries.

Also, a marketing executive with one of Nigeria’s top online vehicle dealerships, Chinenye Ohala, said: “Technology has created a win-win situation for all parties and now both buyers and sellers can emerge satisfied winners. Thanks to technology, buyers can now access inventories from several competing online vehicle dealerships, compare prices and make smarter purchase decisions.”

General challenges

However, despite these successes, some challenges have persisted in the Nigerian auto business. While creating solutions to existing problems, it is not without its own inherent challenges, the major one being fraud which is a headache for most dealers today.

First, while the foreign used tokunbo cars have some form of structure around their distribution, the Nigerian-used tokunbo car market has remained highly fragmented. This has not only created greater problems for sellers but has also inspired a great deal of mistrust in the mind of buyers.

“Nigerian-used car market thrives in so much opacity. In most of the cases, there is no way of ascertaining the true condition of a car or how to make the right valuations,” noted a Lagos-based car dealer.

This remained the situation until another online vehicle marketplace with a unique model- Cars45 was launched in Nigeria in 2015.

Narrating his experiences and challenges in the Nigerian auto business, Head of Marketing at Cars45, an online platform for the sales of Tokunbo cars, Mr. Abiodun Onifade, said: “Unlike other car markets that focus on used cars sales only, Cars45 focuses on buying locally used cars from their owners in a fast and transparent process that is unparalleled in the history of tokunboh car business in Nigeria.”

Addressing the challenges with technology

The Managing Director of Cars45, Etop Ikpe, in his views on how to address the issue of pricing with Tokunbo cars, stated that, “We are easing the friction associated with selling used cars by focusing on three key areas. One of those areas is pricing. Ask any buyer or seller of Nigerian-used cars, and they will tell you that pricing is the thorniest issue in the process”.

According to him, Cars45 has been able to standardise the prices associated with used cars through a proprietary pricing algorithm.

“There is also the challenge of transparency. Most buyers already believe every used car dealers in Nigeria have something to hide. Cars45 addresses this challenge through a reliable car inspection service that helps to put the minds of both buyer and seller at rest,” he said.

According to Ikpe, “We run online live auctions which gives customers 100 per cent visibility into the price offers they receive for any car we inspect at our inspection locations.”

He said: “More so, Cars45 addresses the need for speed. In a market where it would traditionally take up to a month or two to find a serious buyer for a used-car, one can now sell a car in less than an hour without running the risk of underselling. On the average it takes about 30-45 days for users to sell their cars. At Cars45 however, we guarantee a price offer and cash in the bank process within an hour once a customer visits anyone of our inspection locations.”

Customers’ adoption

Nigerians have responded positively to this innovation, showing the great and effective impact technology can have in transforming the Nigerian auto market.

“Just like any great service solving a genuine problem, we have seen massive customer adoption of our model and this justifies our rapid expansion to 27 Centers across Lagos, Abuja and Port Harcourt in just 12 months while thousands of inspections have gone through our platform,” said Ikpe.

With the evolution of modern technologies, it is expected that Nigerians will experience more positive disruptions in their businesses beyond the auto business.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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OPay Urges Customers to Complete BVN, NIN Verification Following CBN Directive

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Opay

OPay, a prominent financial services firm, has called upon its customers to finalize the verification of their accounts by linking their Bank Verification Numbers (BVN) or National Identity Numbers (NIN) in accordance with the recent directive from the Central Bank of Nigeria (CBN).

The CBN, in a circular dated December 1, mandated all deposit money banks to enforce a ‘Post no Debit’ restriction on accounts lacking BVN or NIN.

Accounts without BVN would be placed under a ‘Post No Debit or Credit’ status from March 1, as outlined in the circular jointly signed by Chibuzo Efobi and Haruna Mustapha, Directors at the Payments System Management Department and Financial Policy and Regulation Department, respectively.

OPay affirmed the CBN’s directive and emphasized the necessity for account holders to complete the verification process.

Dauda Gotring, the Managing Director/Chief Executive Officer of OPay, emphasized the importance of a secure and seamless experience for customers.

He encouraged users to comply with the verification process, reassuring them of the company’s commitment to a smooth process and 24/7 customer support.

OPay provided multiple channels for customer assistance, including in-app self-service, WhatsApp, phone lines, and social media platforms.

The company’s commitment to inclusivity and technological advancement underscores its mission to enhance financial services accessibility across Nigeria.

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MTN Group Ltd. Reports 90% Plunge in Profit Amid Nigeria’s Currency Woes

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MTN

MTN Group Ltd., Africa’s largest wireless service provider, has announced a 90% decline in its full-year profit following the plunge in Nigerian Naira.

The company revealed that its earnings per share for the year ending December fell to a range of 1.07 rand to 3.21 rand (approximately 6 to 17 US cents), a significant drop from 10.71 rand recorded in 2022.

The Nigerian naira, which experienced a 49% depreciation in 2023 and an additional 44% decline this year, has emerged as a significant factor impacting MTN’s financial performance.

As one of the world’s worst-performing currencies against the dollar, the naira’s instability has created a volatile economic environment, prompting concerns among international businesses operating in Nigeria.

The currency crisis, stemming from a shortage of dollars and exacerbated by policy missteps and corruption, has led to an exodus of multinational corporations seeking to repatriate earnings from Africa’s largest economy.

Nigeria, with its burgeoning young population and growing tech sector, has struggled to address economic dysfunction despite its vast natural resources.

MTN Group Ltd., which boasts approximately 77 million customers in Nigeria, historically derives a substantial portion of its earnings from the country.

However, the company’s shares plummeted by as much as 7.2% in early trading following the profit announcement, reflecting investor concerns over the challenging operating environment.

Despite the bleak financial report, MTN highlighted positive metrics such as a 45% increase in data traffic and a 49% surge in mobile money transaction volumes.

However, the company refrained from providing guidance on its earnings margins, further adding to uncertainties surrounding its future financial performance.

Analysts underscored the importance of regulatory stability and economic reforms in Nigeria to restore investor confidence and mitigate the impact of currency fluctuations on companies like MTN.

As businesses navigate the economic landscape, the resilience of Nigeria’s currency and regulatory framework remains a critical concern for investors and industry stakeholders alike.

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Leatherback Set for International Growth as EFCC Drops all Fraud and Misconduct Allegations

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Nigeria’s Economic and Financial Crimes Commission (EFCC) has dropped all allegations of fraud and misconduct against Leatherback, a leading financial services technology company, and the company’s CEO, Toyeeb Ibrahim Ibitade.

In November 2023, EFCC announced that it had been made aware of the possibility of fraudulent activities on the Leatherback platform, leading to an investigation into the company’s operations to establish the facts. Cooperating fully with EFCC and working transparently with the organisation’s officials to provide a forensic view of its operations, Leatherback was able to unequivocally prove its innocence, leading the EFCC to drop all allegations and take down all previous communications on its website and social media platforms (Facebook, Instagram, and Twitter) around the matter.

Leatherback supported the EFCC investigation by making over 5,000 printed documents available to officials to enable as much clarity as possible. Leatherback also filed Suspicious Activity Reports (SARs) in the UK and Nigeria.

According to Toyeeb Ibrahim Ibitade, CEO of Leatherback, “I am relieved to see the end of this arduous episode, but I am even more delighted to see that myself and Leatherback, as an organisation, have been completely cleared of all wrongdoing. With this episode firmly behind us, we are poised to accelerate our mission to provide a single access point that empowers individuals and businesses to be truly global, delivering best-in-class financial, payment, and commerce solutions that remove barriers to global growth and mobility for all citizens of the world.”

Headquartered in London, Leatherback is regulated in the United Kingdom, Nigeria, Ethiopia, Canada, India, Pakistan, Nepal, and Sri Lanka, enabling the platform to serve customers across a wide range of markets effectively. Tens of thousands of individuals and businesses already use the platform to support business and lifestyle opportunities every day. Leatherback is also FCA Authorised, PCI DSS Compliant, and ISO Certified.

About Leatherback

Leatherback offers financial services to businesses and individuals in multiple countries with no restrictions. Users can access up to 15 currencies from 21 countries, including NGN, GBP, INR, EUR, USD, and many other currencies. Users can also send and collect money locally and internationally, with invoicing, analytics, and permissions features available for businesses.

For more information, please visit: http://www.leatherback.co

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