Auto assemblers canvass ban on vehicle importation across land borders

Vehicle assemblers say government needs to place a ban on the importation of vehicles across the Nigerian land borders.

At the annual symposium of the Lagos Chamber of Commerce and Industry (LCCI) themed, ‘The Auto Policy: Reality Check; The Economy and the Future’ held in Lagos, stakeholders cited dominance of used vehicles in the country, poor financing of vehicle ownership scheme and smuggling across the land borders as bases for their request.

“Nigeria should totally ban the importation of cars through the land boarders, just like they did for rice,” said Sandeep Malhotra, chief commercial officer, Dana Motors.

According to them, the ban would curtail the smuggling of cars into the country and an abuse of the auto policy by some operators.

Andrew Nevin, chief economist &head of strategy, PricewaterhouseCoopers (PwC), said more people wanted new cars than used ones, stressing the need for the government to create access to financing for cars that should be manufactured here in the country.

“In every market in the world there is some way of financing new cars. Buying a car in cash is not feasible for everyone. We have to look at this before looking at the land border importation issues,” Nevin said.

Nevin noted that as at today, the number of purchased cars in the country had declined to about 180,000 cars, most of which were used cars imported into the country. He stated that the figure was far too low for the Nigerian economy with a large population size.

Acknowledging challenges in the auto sector, the Nigeria Customs Service (NCS), however, said some of the auto operators in the country were abusing the concessionary duty rate by importing different brands against the ones approved.

NCS also stated that some operators were guilty of importing above the quantity approved by taking advantage of gaps created in the policy review of 2009.

“The 44 assembly plants are too ambitious because the economy will not be able to sustain them considering the reality of the day,” said Charles Dike, assistant comptroller-general and zonal coordinator for South-West, who represented Hameed Ibrahim Ali, comptroller- general of the Customs.

Ibrahim advocated for the mergers and acquisition of assembly plants in the country, saying efforts should be geared towards bringing back exercise duties.

The NCS import data indicate that the nation’s automotive industry currently assembles only reasonable quantity of commercial vehicles, as the installed capacity of the industry is below the country’s yearly demand of vehicles, with cluster factories that supply vital components already shut down.

Muda Yusuf, director general, Lagos Chamber of Commerce and Industry (LCCI), called on the government to look into the auto policy, citing it as a top to down strategy.

Josephine Okojie