Stakeholders task new govt. to review auto policy

Almost a year after its implementation, stakeholders in the nation’s automobile industry on Tuesday called on the Federal Government to review the current auto policy in the interest of the economy.

The stakeholders said government should consider reviewing the policy’s approach, timeline and duties payable.

The Federal Government on October 3, 2013 introduced a new auto policy, which came into force on July 1, 2014, with tariff on imported vehicles rising from 20 per cent to 70 per cent.

The circular directing the Nigeria Customs Service said the new increases in duty were in line with Federal Government’s new automotive policy of revamping the automotive industry.

It said the policy would encourage local production of vehicles, enhance entrepreneurial inclusiveness and generate employment for Nigerians.

Aminu Jalal, the Director-General, National Automotive Council (NAC), urged President Muhammadu Buhari’s government to review the policy for the benefit of the economy.

However, Jalal noted the policy was aimed at discouraging the importation of used cars and encourage the manufacturing of new ones locally.

On his part,Kayode Adejumo, a car dealer, said the policy was not delivering on its projected benefits but harming the industry and the economy at large.

Adejumo said the Federal Government should review the policy, especially in view of the prevailing economic situation in the country.

He added “the National Automotive Policy aims to promote sustainability and domestic production of cars in Nigeria.”

“The NAC claims that when fully implemented, the policy will lead to the creation of up to 700,000 jobs in a sector that will produce local cars on sale for less than N1.5 million.”

“Nigeria has relied heavily on auto imports, which account for the largest share of the country’s foreign reserves each year. Local manufacturing has the ability to change this over the long term.”

“While this comes with good intentions for the economy, it bears high risks for both Nigerian buyers of cars and dealers.”

“Nigerians, however, have yet to be convinced that the quality of locally manufactured cars matches that of imported ones.”

The car dealer added that local manufacturing was a long process and needed an ecosystem of local suppliers which was not present at this stage in Nigeria.

“At the same time, increased import duties on used cars would raise prices for the average car buyer who cannot afford to buy a new car,”  he said.

Christian Keller, the Managing Director, Carmudi, an online car dealer, said as many as 80 per cent of new cars and almost 100 per cent of used car customers begun their car shopping experience online.

According to him, 89 per cent of Nigerians use a mix of dealer sites, forums, blogs and social media to gather information and compare prices before making their final decision.

“Nigeria secured the highest year over year growth percentage when it comes to motor vehicle related search inquiries in 2014, with 89 per cent growth, with market for both new and used cars at an estimated value of more than six billion U.S. dollars.”

“Nigeria’s auto industry remains strong, but critical policy changes like the National Automotive Industry Development Plan, have the potential to change the entire industry.”

NAN