The Nigerian auto industry is vast! The opportunities as well limitless! There is room for the big investor, as well as for the mid-level investor. A lot of questions have been asked on how to become an auto dealer in Nigeria. However, little information is available on this subject. Becoming a car dealer in Nigeria is big business. Therefore, it should be treated with the seriousness it requires. Getting an auto dealership license depends on certain conditions. This article highlights these requirements/conditions.
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Auto Dealership License Requirements
Getting a car dealership license in Nigeria requires definite measures. These measures are a necessary precondition to getting an operational license. Therefore, fulfilling these requirements is important. However, there is currently no central car dealership licensing body. Every state in Nigeria has its own licensing procedure and requirement.
Overall, these differences are not significant when compared from state to state. In Lagos State for instance, the Motor Vehicle Administration Agency (MVAA) gives licenses to vehicle dealers. The following are requirements for obtaining dealership licensing;
1. Sufficient Start-Up Costs
This is very important. To qualify for vehicle dealership licensing in Nigeria, having sufficient financial requirement is key. Interested investors need to have a clear understanding of this. Starting an auto dealership in Nigeria requires huge investments.
The absence of sufficient proofs of funding this business may lead to outright disqualification. In addition, as part of the conditions, payment of licensing fees (unverified) is a requirement.
Having a form of credit worthiness is also an added advantage. Being credit worthy allows the investor apply for loan for funding of this business.
2. Financing Arrangement
Financing arrangement is an important consideration to make. There is a clear indication of the source of financing for the business. By source of financing, we mean either funding the business from personal savings or obtaining a loan from a bank.
Whatever the case, getting adequate financing is necessary to the success of the business venture. The amount of capital raised determines the scale of the auto business. This in turn influences the type of licensing obtained.
3. Knowledge of the Auto Industry’s Regulatory Framework
By the above statement, it simply means that before seeking for licensing, knowledge on the regulatory framework guiding the industry must be possessed. By having the right knowledge, it guides the entire process of starting the business.
This is also in addition to putting the necessary things in place, of which licensing is a part of. This knowledge will be relevant during the process of application for an auto license.
4. Establishing Contact with Suppliers
Every business needs to establish a strong connection with the supplier. Without suppliers, the success rate of the business will dwindle. Hence, the auto dealership needs a strong link with the supplier.
This fosters a good working condition between the auto dealer and supplier, which in many cases leads to significant discounts which is good for business. By having this important requirement in place, the business will be considered strong and ripe for licensing.
However, it is important to note that this in itself is not enough. Further preparations required to start a successful auto dealership business.
Get to Know the Requirements for Your State
As mentioned earlier, each state in Nigeria has its own licensing application procedure. To obtain licensing, it is necessary to have a knowledge on what the requirements are for your state of choice. Currently, there is little information regarding this subject.
Hence, to easily obtain this information, consider visiting the Federal Road Safety Commission office in your state. Although this might sound a bit off due to their role of maintaining safety on the highways, they can provide useful information regarding this matter.
For Lagos State, the Motor Vehicle Administration Agency (MVAA) is body mandated by state laws to license auto dealers in the state. Other states have similar organs which have the same function. Carefully making this inquiry will be of immense benefit.
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In answering the question on how to get auto dealership license in Nigeria, this article has provided the step by step process of obtaining the licence. Although every state has its own body responsible for licensing auto dealers, the licensing procedures are similar as there are just a few differences if any.