Nigerians Disappear With Cars Bought From Us On Credit- Nord Automobile Founder

The founder and Chief Executive Officer of Nord Automobile, Ajayi Oluwatobi, has revealed that some customers who took his brand on credit disappeared, while some defaulted due to the country’s poor identity system.

The founder of the 6-year-old indigenous car manufacturing company made the disclosure during an X-space on the Nigerian automotive industry organised by Kalu Aja which was monitored by THE WHISTLER.

Oluwatobi said there is no reason why people have to pay for their cars in full, but he said banks that partnered with his company charged excessive interest rates, which makes the car financing scheme unattractive.

The founder said, “Cars are usually the second most expensive thing; an average person will buy in their lifetime after a house. So, it makes sense to actually spread payment for cars. Nigerians should not buy cars at once. They should spread it out for as much as five to six years.

“However, we have some problems. I tried to ignore it. Two years ago, on my own, we started a financing program, because we tried to get some banks to support.

“Some banks supported it, but the interest rate was too high. Most customers are not interested because interest rates are around 28 per cent per annum. So, when you say you are doing car financing, but it is at 28 per cent, it’s almost like you are not doing it. Because it is very difficult to get somebody to buy a car and spread the payment for about 28 per cent. So, we tried to do it, and we brought the interest rate down to around 15 per cent.”

On the sidelines of the United Nations General Assembly in New York, President Bola Ahmed Tinubu insisted on resetting the Nigerian credit system to ensure that cheap credits are made available to help Nigerian workers drive their dream cars and get cheap mortgages.

Local manufacturers like Innoson Vehicle Manufacturing Co. Ltd. are running a car financing scheme in partnership with Access Bank Plc. But the Nord Automobile boss said the country does not have a good system to track debtors.

The Nord CEO said, “It didn’t work too well. We had a lot of defaults and a lot of issues, which are some of the problems actually plaguing our credit system. We also have to solve that problem. But I think that it is the way to go. The reason why I started the credit system was because I analyzed that if we’re able to sell some vehicles with payments, we will sell maybe 10 times more than we currently sell.

“So, that’s like 10 times our current revenue. And that was the incentive for me. But we tried this, and it didn’t work out so well. We had a lot of defaults. People just refusing to pay, people changing addresses, people moving away, and people changing jobs. It was so much trouble because we don’t really have a good identity system. So, it’s very hard for people to just pay that credit. You have to rely on the person’s morality to pay you back and it is not very reliable.”