Importing tokunbo spare parts for automobiles is often misconstrued as a business that is exclusively for people from the south-eastern part of Nigeria or hooligans and the uneducated. But there is no doubt that the industry has created more millionaires than any other trade in Nigeria, in the last 30 years. Tokunbo is a Yoruba term for second hand or fairly used items and it is most commonly used to refer to foreign used cars and spare parts.
The need for auto parts is constantly growing, especially in major commercial cities of the country like Lagos, Abuja and Port Harcourt, where the growing middle and upper class need to maintain their vehicles regularly.
Tokunbo parts are preferred over the new parts for many reasons, including the assumption that some of the new parts in the market are either too expensive or fake. But the foreign used or tokunbo parts are cheaper and often more reliable as they were manufactured and used by Europeans who do not compromise with high standards and adhere to a good maintenance culture.
If you have to change any spare part for your vehicle or equipment and engage any automobile mechanic in the major cities, they will be quick to tell you in pidgin English: ‘buy tokunbo because e better pass new one’.
Before venturing into the tokunbo trade, the first thing to consider is where you will be getting regular supplies. Most of the tokunbo parts come from the United States of America and European countries like Germany, Belgium, Denmark, Netherlands, and so on. The best technology, automobiles and spare parts are known to originate from these countries, and there is the notion that most of the spare parts originating from these countries are still in top shape as they are usually discarded along with vehicles that are going out of vogue due to new technology or updated design, rather than due to damage. So smart importers get the fairly used spare parts, which are still very usable, for free or next to nothing. These parts are sold at a premium in Nigerian auto markets, with many dealers smiling to the bank.
While putting together your business plan, it is also important to identify automobile brands and models which are in vogue in the country like Toyota (Corolla, Camry, Sienna others), Honda (Accord, City, Civic, CR-V Nissan (Pathfinder, Murano, Maxima, Altima, others), BMWs, Mercedes Benz and so on.
Spare parts from these commonly used cars are a gold mine because they are continuously in demand. Apart from engine components, items such as side mirrors, bumpers, rims, and other fittings are usually also in very high demand.
Vehicle tyres, air conditioning units and parts, and other similar items are a major business on their own. Many people concentrate on brake pads and oil filters because vehicles require these items regularly to service
Another important consideration in your business plan should be market or warehouse to display wares and registration with dealers’ associations. People who have delved into that business advise due registration with the dealers’ association in the area you choose to sell from, otherwise the bigger importers and shop owners have a way of sabotaging new businesses that do not comply with their policies.
The ideal situation would be to understudy or get more details about the nitty gritty of the business from those already in the trade, especially as it concerns government agencies like the Standards Organization of Nigeria (SON) and licensing.
You can hire a warehouse and if you are in Lagos, and the popular location for this is the Ladipo area. About N5m to N12m may be required to fill a 40 feet container, depending on the items you purchase.
But you can still purchase with far lesser amount like N500,000 to N1m by liaising with any reliable importer who may add your goods with his own and deliver to you. In fact, it may be wiser to start small and learn the ropes and grow organically, unless you have a confirmed order or identify a clear gap to fill.
So, you can make your findings now and get involved in the big tokunbo spare parts market.
I came across your artcle on tokunbo car parts and i wanted to ask if its still going
to be a profitable venture if one sends it from US/Canada considering the exchange rates
and our importation levys at the moment.
Can the engines come as CKD s or accidentted cars too in a container?
I will prefer already dismantled engines and parts in a container already if am asked.
I also wanted to ask if there are Used engines assosiation contact details you may have or direct one
on how to go about connecting with the local dealers assosciations to align before engaging in the business.
Also does SON have any requirements too?
Share more details if you can.