I live and work in the UK and contemplating exporting used cars parts to Nigeria. The parts I intend bringing include – engines, dashboards, abs pumps, a/c condensers, gearbox ecu’s, cylinder heads, kompressors, crankhafts etc.  I plan buying the parts from car breakers and yards, inspect them carefully prior to shipment.

I don’t have any experience in this type of business and would appreciate your advice and suggestions on this proposed business.

1) Which are the most popular cars in Nigeria?
2) Are there any restrictions to the importation of used cars parts to Nigeria?
3) What kind of profit margin can one expect from this business?
4) What are the risks inherent in this proposal?

I would really appreciate your input, advice or suggestions on this my business proposal as I am by nature very risk averse.

Exporting of used car parts into Nigeria could be highly rewarding.But you need to take your time to do trade intelligence.
There are assorted brands that you could export,but the most popular ones are Honda,Toyota,Volkswagen,Mercedese benz,mitsubishi,Nissan,Mazda,BMW and recently Izuzu series.
Feel free if you have specific questions to ask me.
You can contact me on this forum or directly thru mail:essyske@gmail.com
All the best.

Thank you guys for your different contributions. They have been richly revealing and i have really learnt a lot from your various takes on this proposal. I know every business involves some measure of risk taking but any adverse outcome can be reduced to a minimum by a thorough market research which informed the opening of this thread. There is always some inertia and anxiety before embarking on a new venture but it is important to be careful but not be cowed into a state of retreat or indecision. I have decided to proceed with this venture in early 2012 and i have trusted people back home in Nigeria who are very dilligent and committed.

I have equally done some research here in the UK which is still ongoing and i have made contacts with several salvage yards who would supply the parts. I have also made contact with a shipper with whom had previously done some business in the past.
My aim is to focus on the common autos used in Nigeria- Toyota, Honda, Nissan and Peugeot.
What years are most commonly sought after - 1995 to 2000, 2000 to 2005 or 2005 to 2010. My guess is that more cars will fall into the 2000 o 2005 bracket.
Is it better to focus on a few parts i.e. less than 10 or should i just order as many different parts as possible? If you think i should focus on a few number of parts, kindly give your reason and examples of the parts that would move fast.
Which will have a higher profit margin, buying a vehicle and breaking it down into it's constituent parts or buying the individual parts from car breakers?
I look forward to your continued and constructive input into this thread.

areeo:

Exporting of used car parts into Nigeria could be highly rewarding.But you need to take your time to do trade intelligence.
There are assorted brands that you could export,but the most popular ones are Honda,Toyota,Volkswagen,Mercedese benz,mitsubishi,Nissan,Mazda,BMW and recently Izuzu series.
Feel free if you have specific questions to ask me.
You can contact me on this forum or directly thru mail:essyske@gmail.com
All the best.

i have sent an email from my yahoo'doctorkk1001@yahoo.co.uk.

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@ Poster in response to your query. I have done this same business from the UK for a couple of years and got out. There is demand for virtually every type of car part for cars that run in Nigeria especially Japanese, German and Peugeot cars. The challenges involved are first of all being knowledgeable enough to know which car parts are needed for each vehicle. For e.g. certain body parts will make you more money than engines of the same vehicles due to the accidents that occur everyday e.g. lights, fenders, bumpers etc.

The only problem lies with the cartel that buys your stuff in Nigeria. Just like you are doing we did our research very well and got in touch with the traders in Lagos and they expressed a lot of interest and gave us advice on what to get and prices. The issue lies on delivery of the goods. The same guys will show up at your rented warehouse and start pricing the items less than half of what they advised you on the phone stating that one or two non-essential parts are missing or the market has suddenly changed. They use a lot of proxies or if you’re igbo "Oso Ahia" guys to come and price the items within the same range and you are left with no option to sell at almost cost price at times. Also if any of the top traders in a particular line shows up, no one hardly interferes with the goods or if he is the one organising sales for you nobody prices the particular product he is into e.g. our guy was a Nissan merchant and we noticed that each time we brought Nissan engines nobody in ladipo will show up to buy Nissan parts from us ( not that we are not interested in selling the items to him ) and this gives him monopoly and we have to accept whatever he offers as we have only a week or so to sell the items

As per shipping and forwarding we used 20 ft container sized trucks and loaded our goods in it and sold the truck in naija. That is another challenge as the truck type, size and length of time spent at the show location affects your profit. But we somehow always made some cash with the truck though it took forever to sell at the truck incurring daily demurrage and selling fees.

After about three attempts and learning from several mistakes we decided to call it quits as we barely broke even.

My advise for anyone wishing to do this business is to do the following

1. Best to be a mechanic or have a mechanic on ground at the scrap yard all the time monitoring and picking up the right parts
2. Do your home work very well on the Nigerian end and trust nobody. Get into the local spare parts market and do your survey yourself
3. Get a permanent shop if you can and sell the items at your own pace and time. If you are doing this part time, it’s very difficult as you are pressured to sell quickly at times at a loss and head back to base. lf you decide to leave with friends or relatives then you will incur more running costs and losses.

Old boy, jikings has said it all. THAT IS A MILLION DOLLAR ADVICE

Jikings.
How do you do bussiness without some elements of trust?
Am just wondering aloud.
Welllll.

areeo:

Jikings.
How do you do bussiness without some elements of trust?
Am just wondering aloud.
Welllll.

Areeo, I'm not too sure you understand what Jikings is saying here. Every trade/business has its mode of operation, incidentally the nature of this business may not be in best interest of Burgerking except he is willing to do so much for so so little; not until he has his own retail outlet to sell directly to the end consumers. I have been through a similar experience and I can identify where Jikings words of wisdom is coming from. Now please help me understand in simple ENGLISH, what does that have to do with trust?

Thanks Jikings for your contribution which has definitely been the most insightful and shed a lot of spolight into the workings of this business. Your detailed post including revelations of teh bargaining tactics of the traders leaves me in no doubt that you were once in this business. I am sorry you had to give up due to the dirty tricks of the traders. I understand that this 'cartel -tactics' makes it difficult to negotiate individually with the traders and get a best price.
However, I know these ladipo traders regularly buy these parts from importers, so, how do the importers get around these obstacles?
I will look into your suggestion of setting up a shop and sell directly to the public, although that may be too slow for me, but it is definitely be an option worth considering.
How di you source your parts while in the biz? If i am able to source the parts cheaply, don't you think one can still make a modest profit irrespective of how low the traders offer? (There must always be a nadir whereby their pricing will seem ridiculous).
I am also considering to sell to a wider geographical area in the west, which i am hoping will neutralise the trader's monopolistic tricks. i.e. it will be difficult for ladipo traders to influence ibadan spare part traders.
I am still in the consultative process and will make a decision on whether to run or jump, only after a careful review of all the data and advice from my research.
Thank you guys for your various suggestions.

kamisco:

Areeo, I'm not too sure you understand what Jikings is saying here. Every trade/business has its mode of operation, incidentally the nature of this business may not be in best interest of Burgerking except he is willing to do so much for so so little; not until he has his own retail outlet to sell directly to the end consumers. I have been through a similar experience and I can identify where Jikings words of wisdom is coming from. Now please help me understand in simple ENGLISH, what does that have to do with trust?

Thanks for your comment. We quit cus the price wasn't worth the risk. The returns for us will be too little even when we eliminated the direct influence of some of the externalities. We had good jobs and this was a side biz for us. If I thus was my only income as most of other importers are then I would have made a success of it.

The guys that make it in spare parts are not the part-timers. If I had time I would spend more time with the scrap yard guy. Cus you show up once a week or so during the breaking process and you can't possibly spend enough time checking all he did for you.

@ Poster, remember moving your goods accross various geographical zones adds more cost and risk. To transport your 20ft container from Apapa to Ladipo will Cost nearly 70k including police egunge, agbero and lastma settlement. When your are moving across other states, then this figure quickly multiplies.

I'm not trying to discourage you though but just to provide more info for anyone wishing to do this biz.

Once again best of luck!

I love the contribution i have read so far. I hope the situation of things on Ladipo guys cheating importers have changed.

To provide a solution to this problem, i will suggest doing a small size of shipment before a 20ft container so as to avoid discouragement if things don't go well.

I am also interested in this business, but will do a lot of research about ladipo guys before i commence.