Latviski English По-русски
Friday 28.10.2016 | Name days: Ninona, Ņina, Antoņina, Oksana

Opinion: what is the fate of used cars in Latvia?

(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RULatvia and the entire Baltic region has been a very popular market for used cars dealers from Western Europe since the restoration of independence. The used cars market was rather lucrative in the ‘90s. Even though the inflow of used cars has reduced over the years, imports of used cars in Latvia remain higher than imports of new cars.

«We began actively dealing in used cars set for import to Africa in 2004, when many dealers coursed on the Switzerland-Antwerp –Switzerland route, collecting used cars for exports in Switzerland and new models in Antwerp,» – says head of Kurbads logistical department Kristine Rimene.

In 2009, re-exports of new cars became popular. In 2012, when purchasing power recovered on the local market, this trend dried out. However, the volume of exported cars remained. According to information from Kurbads, exports of used cars from the largest European ports lead to Africa. The lion’s share of those cars is carried to Nigeria.

The used cars export scheme

«Once a week, the big Ro-Ro ferry with 1,000 used cars gathered from all over Europe departs from Antwerp, Rotterdam or Hamburg to the western coast of Africa. The cars carried by this ferry are provided by many different suppliers,» – says one anonymous business individual.

«It is important to make sure the ferry is 100% full. Otherwise the shipping company suffers losses. Because of that, companies often buy additional used cars to fill up storage. Later these cars are realized in Africa at the same prices, which create dumping on the market. It is a big obstacle in this kind of business.»

The Nigerian government has instituted a National Automobile Industry Development Plan, which provides for stimulating local car manufacture industry. The current situation with large imports of cars is considered problematic. This is why the Nigerian government has decided to increase import tax for used cars by 70%.

«It is because of customs that car exports end up in Nigeria’s neighbouring states – Togo, Ghana and Benin. From there, locals deliver these cars to Nigeria.»

«Other popular destinations for used European cars include Libya and Senegal,» – adds Kristine Rimene.

The fate of Latvian cars

«Africans know used cars well. This is why they would rather not buy cars from Latvia or other post-Soviet countries, because technical state of cars from this region is significantly worse than that of cars from Western Europe. This is why it is a lot harder for us to sell cars, so we are forced to draw in potential buyers using lower prices.»

Exports of cars from post-Soviet countries has its specific nuances: «Usually vehicles from Latvian and Estonia are in a poor technical state and/or are filled with all kinds of items. This causes additional problems for us in ports due to additional weight,» – Rimene describes the situation.

«We receive orders from European network members to bring specific cars to one of some of the largest ports in Western Europe. Then these cars are shipped to different destinations.»

Nigeria’s growing car market

Nigeria had a fairly well-developed car manufacture industry in 1970-1985. This was largely due to the country’s declared independence and oil price surge at the time. Unfortunately, the industry gradually declined into nothing.

Used cars that are shipped to Nigeria’s largest ports currently dominate the market. According to information compiled by the Nigerian National Automotive Council, approximately 150,000 used cars are imported, mainly from Europe, every year. With customs and spare parts, this market reaches USD 3.5 billion in value. Only 50,000 new cars are shipped to Nigeria annually.

«If we do not adopt a new policy, pressure on state economy will become unbearable, because even now we are too reliant on imports – it is not the way we want to use foreign currency,» – said Nigerian Industry, Trade and Investment Minister Olusegun Aganga.

Larger economy in Western Africa

Nigeria is the largest economy in Africa with its GDP worth USD 594 billion. In 2012, it took the lead from the previous economic leader – South African Republic.

More than 170 million people live in West Africa, including 15,700 millionaires.

Oil and gas exports (98% of all exports) form the foundation of the economy. What is interesting is the fact that residents of the largest exporter of oil in Africa are forced to wait in long queues at petrol stations…because of fuel deficit.

Notable economic growth is currently registered only in the south east of the country, especially in Lagos, which is the region’s business centre. The north is more under control of by Boko Haram terrorist organization than it is under control by the federal government.

Logistical comparison

According to results of the World Bank’s Logistics Performance Index study, Nigeria was on the 75th place in the world and Latvia was on the 36th place in 2014. This index is meant to help countries identify challenges and options in logistics in order to improve their results.

Nigeria’s largest problems, as mentioned in the study, lie in customs and infrastructure. The same applies to Latvia. However, low logistical performance is only one of multiple reasons why the oil country’s economy does not develop quicker.

Development restrictions

Boko Haram terrorist organization, which stands against Western values, in based in the north of Nigeria. They frequently partake in armed attacks and kidnappings in the region keeping the local populace in a constant state of fear. The Nigerian government seems unable to find resources to combat these terrorists.

Corruption remains one of the most wide-spread problems in Africa. Nigeria is no exception. Corruption is found even on highest level of the government. It is also one of the reasons why the oil superpower has to import fuel in order to satisfy demand. State orders are entrusted to people close to officials in power. Police, who are terribly underpaid, are unwilling to resolve these matters. Instead, they are more interested in making more money.

These are the obstacles that prevent the country from developing at a faster pace.


Leave a reply

KNAB selection process concludes with no results

Members of the committee responsible for selecting the new head of the Corruption Prevention and Combating Bureau decided not to pick any of the available candidates, Martins Krievins, director of the state Chancellery and chairman of the selection committee, announced on Friday, 28 October.

Retail trade turnover up 0.5% in Latvia

Compared to September 2015, total retail trade turnover rose by 0.5% in September 2016. Turnover of retail trade in food products decreased by 1.8%, whereas the turnover of retail trade in non-food products increased by 1.6%.

16+1 business forum in Riga to gather around 300 businessmen from China

As part of the upcoming summit of leaders of state of countries participating in the 16+1 cooperation format between China and countries of Central and Eastern Europe in Riga there will also be a business forum. Participation in this forum has been confirmed by 150 high-rank state and business representatives from seventeen countries.

Moldova up for polarising presidential election

Voters in Moldova will on October 30 go to ballot boxes in order to express their support to the country’s foreign policy direction towards the European Union or to closer links with the Kremlin, by electing a president.

Latvia’s banking sector earned 374 million this year

In the first nine months of 2016, Latvia’s banking sector functioned with profits worth EUR 374 million. All sixteen Latvian banks and three out of seven foreign bank branches in Latvia worked with profits in this nine-month period.

Sakharov Prize awarded to Yazidi women activists

The European Parliament’s Sakharov Prize has been awarded to Yazidi activists Nadia Murad and Lamiya Aji Bashar, victims of sexual slavery under the rule of terrorist group «Islamic State».

Russian opposition: Putin has few supporters and just as many opponents

Russia’s weak spot is President Vladimir Putin’s built system, in which everything depends on a single person, said coordinator of Mikhail Khodorkovsky’s Open Russia foundation Vladimir Kara-Murza at a discussion organized by Konrad Adenauer.

Countries agree to establish world’s widest marine protected area in Antarctica

The European Union and 24 more countries have reached an agreement to declare Ross Sea in Antarctica a marine protected area – largest in the world.

Belgian regions agree on CETA changes to support EU-Canada free trade agreement

The political leaders of Belgian regions and communities have on October 27 agreed on a consensus to support the free trade agreement between the EU and Canada, Belgian Prime Minister Charles Michel stated.

Post-election flare-ups emerge in Lithuania, as winners build new government

Nearly a week after the second round of Lithuania‘s general election, the Lithuanian Peasant and Green Union, the holder of 54 mandates in the141-member Lithuanian Parliament, has not gotten a step closer to agreeing with other political parties on a new Cabinet.

Antane: we still need Russia in order to work with China

«There is nothing good I can say about the current state of Latvia’s transit industry – cargo volumes handled by the country’s ports continue to decline. The volume of coal cargoes transshipped by Ventspils port, for example, has dropped to 40%. The overall decline last year, when compared to 2014, reaches 20.5%. This decline has been continuing since 2012,» – Inga Antane, president of the Baltic Association –Transport and Logistics, said in an interview to

Construction costs in Latvia up 0.1%

Compared to August, the level of construction costs in Latvia increased by 0.1% in September 2016. Prices of building materials, as well as maintenance and operational costs of machinery and equipment did not change significantly, whereas labour remuneration of workers grew by 0.5%.

Think tank forum to assess the state and development of 16+1 format

Latvia’s Foreign Policy Institute will organize a forum for international think tanks for countries taking part in the 16+1 format in the Foreign Ministry in Riga on 4 November.

EP: 2017 budget should allocate more money to jobs and youth

The European Parliament has carried out a plenary vote to request more money to help young people find jobs, enhance economic growth and help third countries deal with the migration crisis. According to MEPs, the opinion of the EU Council in regards to budget cuts should be changed in the opposite direction.

EP approves million-euro assistance to Estonian laid-off industry workers

The European Parliament has backed the allocation of 1.1 million euros to assist people in north-eastern Estonia, who lost their jobs in mass lay-offs in shale oil production and chemical industry.

NATO confirms entry of two Russian warships into Baltic Sea waters

On Wednesday, 26 October, NATO confirmed the entry of two Russian warships into the waters of the Baltic Sea.

Italy hit by earthquakes again

A pair of powerful earthquakes have shaken central Italy on October 26, causing damage to buildings.

Changes to Handling of Alcoholic Beverages Law and other matters viewed by Saeima

On Thursday, 27 October, the Saeima will gather for a meeting to decide on the new legal draft On Public Procurements. New regulations for procurements provide a number of changes and additions to the current regulations.

Study: Wildlife populations have globally decreased by 58% since 1970s

The numbers of wildlife in the world have since 1970 decreased by 58%, it has been found in a study.

Fine applied to two Knauf Group plasterboard suppliers

On 30 September, Latvia’s Competition Council made the decision to punish Knauf and Knauf Group’s Norgips sp.z.o.o. from Poland for using a loyalty system that considerably restricted competition, thereby breaching the prohibition on abuse of market dominance.

Pharmacies in Sweden restrict sale of paracetamol

Restrictions should be put in place in the sale of paracetamol setting forth a ban to sell more than one pack of the drug to minors, decided Swedish pharmacies on October 26.

Ambassador: we are beneficial to the Chinese, but we can be even better

On 5 November, Latvia will not only be the host for the 16+1 format, but also the destination for the first official visit by the Chinese prime minister, said Latvia’s ambassador in China Maris Selga.

UK pledges to send drones and tanks to Estonia

British defence minister has this week outlined the country’s plans of its involvement in NATO’s push to increase the defence capabilities of Estonia.

Not all Roma happy about Lithuanian firm making tours to largest Roma village in Baltics

Lithuanian Roma representatives have been critical about a tour agency organising sightseeing tours to the village of Kirtimai promoted as «an extreme challenge» having a former drug addict as a guide.

Fifteen Syrian refuges arrive in Latvia from Greece

On Tuesday, 25 October, fifteen people, including nine children, arrived in Latvia from Greece as part of the European Union resettlement programme.

Newest comments