How to start a lucrative Tyre Business in Nigeria

When launching a new tire business, research and planning are key. You must understand your target customers’ needs to stock the right tire brands and sizes. Locating your shop strategically to attract those customers will also be critical.

The global tyre market is estimated to be $190 billion while the tyre market in Nigeria is about $1.0 billion. The total Nigerian tyre market size is estimated to be 5.7 million units (car, van & light truck – 3.9m and truck – 1.8m) with a projected growth rate of 3-5% annually). There are about 150 brands of tyres in the Nigerian market with five dominant players namely: Dunlop, Michelin, Bridgestone, Pirelli and Firestone. By 2008, all the imported brands accounted for about 90% share of the market as against only 25% in 2005. Today, all the tyres in the Nigerian market are imported following the cessation of local tyre manufacturing.

Are you exploring how to start a tire shop? Great idea! It’s a potentially lucrative business venture. But there are several crucial steps you need to nail first to ensure your tire shop’s success, from choosing the perfect location to marketing the business effectively.

Understand the purchasing habits of your potential customers. Look for gaps in the market that your shop can fill. This could come in offering better customer service, competitive pricing, or unique products. But identifying your unique selling proposition will set you up for success.

In December 2006, Michelin Nigeria Limited shut its factory due to the harsh operating environment (infrastructural deficiency, tariff structure, etc), disposed its equipment and left, after 43 years of operations in Nigeria. Dunlop Nigeria Plc continued despite the fact that the problems that made Michelin to relocate out of Nigeria also affected it but remained with the hope that those problems would be addressed.

Unfortunately, these problems made it difficult for Dunlop to dispose its tyres (both truck and car) at reasonable margins because it had to compete with imports at 10% duty rate and the attendant infrastructural disadvantage which increased its production cost by about 40%.

Manage inventory efficiently: Efficient inventory management is crucial for minimizing costs and maximizing profits. Implement a system that tracks tire inventory levels, identifies fast-moving items, and helps you reorder stock when necessary. Regularly review your inventory to prevent overstocking or under stocking. You can also use your shop management system to help you with that.

Provide competitive pricing: Price your products and services competitively to attract budget-conscious customers. Consider offering package deals or discounts for loyal customers to encourage repeat business. Regularly monitor your pricing strategy to stay competitive in the market.

Build relationships with suppliers: Develop strong relationships with tire suppliers and distributors to ensure a steady supply of quality products. Negotiate favorable terms and explore bulk purchase options. These can help you reduce costs and increase your profits.

Expand your services: As your tire shop grows, consider expanding your services to increase revenue. This may include offering general auto repair services like oil changes, brake repairs, or vehicle inspections. Diversifying your service offerings can help you attract a broader customer base.

Generate customer loyalty: Building a loyal customer base is essential for long-term success. Implement a customer loyalty program that rewards repeat business. Offer promotions or exclusive perks to incentivize customers to choose your tire shop over competitors.

You need to make sure that you are importing the right type of tyre for your car. For example, imported car tyres are not meant for heavy duty trucks. To import tyres to Nigeria, there are several things you need to do- research your options, find out the laws on importing tyres into Nigeria, and then negotiate with a reliable tyre importer. Get all the advice on importing tyres to Nigeria.

There are two types of Tie in the market, they are,  – wire and non-wire. The, wire ties  are made with strands of wires like copper. And when such ties are worn out, strands of wire are seen. While the non-plier ties are made with a special kind of rubber. It is important to encourage your customers to go for wire tires, especially if they are commercial drivers or  they use your vehicle on a daily basis. This is because over the years, those ties have been proven to be more durable.

Profitability: If you are selling fairly used Tyre called Tokunbo Tyre, You can make a profit of N10,000 per Tyre If you sell Ten Tyre, that is a profit of about N100,000 naira every day. You can even make more if you invest more in this lucrative Tyre Business

A brand new Tyre of 255/55/R20 cost N128,000,  225/55/R18 cost N230,000, 255/50/R19 cost N190,000,  285/40/R23 Cost N1,380,000,  A255/50/R20 Cost N140,000 and 245/60/R20 cost N380,000. An investor can make between N10,000 to N250,000 profit per Tyre

Nigerian law dictates that every imported car tyre must have a Nigerian Import Permit issued by the department of commerce before leaving the country’s borders. There are fees associated with this permit- 10% of the value of the tyre plus an additional N10 per kilogram of weight. But if your tyre is below 50kgs in weight- then there will be no additional fee and only 10% of the value of the tyre will be taxed.

Becoming a Tyre dealer in Nigeria requires careful planning, research, and execution. By following this comprehensive guide, you can establish a successful Car Tyre Business. and capitalize on the thriving automotive industry in Nigeria. Remember to comply with legal requirements, build strong relationships with suppliers and customers, and provide exceptional customer service. With dedication, perseverance, and a strategic approach, you can carve a niche in the car Tyre dealership business and achieve long-term success.

How to be a successful Car Tyre Business in Nigeria. The body of this work is formed from consulting experienced and relevant people running the Car Tyre Business, to get first-hand information about the success secrets and marketing strategies deployed to achieve business success.

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