COLLAPSE OF CEASEFIRE: MEND issues two-week ultimatum
Vanguard Newspaper 10 July 2016
Vanguard Newspaper 10 July 2016
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VANGUARD, SUNDAY, JULY 10, 2016, PAGE 27<br />
Dodge, Chrysler, Jeep record improved sales<br />
A typical used car market<br />
Auto policy summit: Dealers<br />
differ on imported used cars<br />
THERE is a saying that when<br />
<strong>two</strong> brothers come out from a<br />
meeting, frowning, they must<br />
have told each other the bitter<br />
truth. This was exactly what happened<br />
recently at the Oriental<br />
Hotel, Victoria Island, Lagos, venue<br />
of the one-day stakeholders’<br />
forum on the Nigerian automotive<br />
industry. The event put together<br />
by the Nigerian Economic<br />
Summit Group has the theme<br />
Setting an implementation agenda<br />
for the national automotive<br />
plants. The forum discussed the<br />
way forward for the Nigerian<br />
Automotive Industry Development<br />
Plan, NAIDP, with the main<br />
objective of eliminating existing<br />
limitations in implementation<br />
process.<br />
Present at the event were<br />
Minister of Industry, Trade and<br />
Investments, Dr. Okechukwu<br />
Enelomah, the Director General<br />
of National Automotive Design<br />
and Development Council as well<br />
as chieftains in the automotive industry,<br />
like Chief Michael Ade-<br />
Ojo of Elizade Group, William<br />
Anumudu of Globe Motors, Cosmos<br />
Maduka of Coscharis Group,<br />
Ibrahim Boyi of PAN Nigeria Ltd,<br />
and a host of others.<br />
In his opening speech, the<br />
Chief Executive Officer of the Nigerian<br />
Economic Summit, Laoye<br />
Jaiyeola, noted the importance of<br />
the auto sector to the nation’s economic<br />
development.<br />
According to him, the choice of<br />
the automotive industry as one<br />
of those targeted for diversification<br />
of the economy is predicated<br />
on the potential of the industry<br />
to play a strategic and catalytic<br />
role in economic development<br />
in the area of employment creation,<br />
GDP contribution, SME development.<br />
Automotive parts,<br />
components and services, skills<br />
development and the acquisition<br />
of technology other areas are the<br />
sector can also boost the economy.<br />
He regretted that though the<br />
size of the automobile market in<br />
Nigeria is worth over four billion<br />
dollars annually, it does not translate<br />
into anything meaningful for<br />
the country characterised by importation.<br />
So the forum was challenged<br />
to leave no stone unturned in<br />
proffering solution that could<br />
make the policy work.<br />
Jaiyeola reminded the participants<br />
that the success NAIDP<br />
does not only have implications<br />
for the development of small and<br />
medium enterprises, but ultimately<br />
offers the opportunity of Nigeria<br />
moving significantly on the<br />
Doing Business rankings or indeed<br />
the WEF competitive<br />
rankng.<br />
The discussant which includes<br />
The Managing Director of PAN<br />
Nigeria Ltd, Ibrahim Boyi; Managing<br />
Director of Toyota Nigeria<br />
Ltd, Mr. Kunle Ade-Ojo, Dr. Cosmas<br />
Maduka of Coscharis Group,<br />
Thomas Pelletier, Managing<br />
Director CFAO Automotive,<br />
Tokunbo Aromolaran, Managing<br />
Director of VON Automobiles<br />
Ltd, expressed their views<br />
on the ban of imported used vehicles,<br />
tariff increase, closure of<br />
land border.<br />
Setting the debate in motion,<br />
the Minister of Industry, Trade<br />
and Investment, explained that<br />
President Muhammadu Buhari’s<br />
administration does not<br />
only believe in the auto policy<br />
but is also determined to make<br />
a success of it.<br />
While the stakeholders agreed<br />
on the importance of having a<br />
robust auto policy, one issue<br />
they expressed divergent views<br />
was imported used vehicles,<br />
which control a chunk of the<br />
nation’s auto market.<br />
Mr. Ade-Ojo, noted that placing<br />
a ban on imported used vehicles<br />
should not be the first<br />
thing to do.<br />
In his views: “We are importing<br />
used vehicles, because local<br />
assemblers are not able to<br />
meet up the volume of vehicles<br />
required by the consumers<br />
at the price they can afford.<br />
“My take, therefore, is that<br />
rather than keep looking at<br />
placing a ban on imported<br />
used vehicles, we should try<br />
to build local content, which is<br />
the only way the fruit of the<br />
auto policy can be reaped.<br />
“Right now, everything is<br />
imported. If we can make the<br />
tyres, batteries and other parts<br />
locally, all of us will be able to<br />
use them. What we are doing<br />
at the moment is mere assembling,<br />
which contribute very little<br />
to the economy," he said.<br />
Meanwhile, Coscharis<br />
chairman, Dr. Maduka, maintained<br />
that Nigeria has no reasons<br />
importing used vehicles,<br />
which in his view, amounts to<br />
working against the growth of<br />
the auto industry.<br />
“In the 70s, “no one was buying<br />
used vehicles. If the government<br />
is willing to make<br />
things happen, they must ban<br />
importation of used vehicles. As<br />
I am speaking here, we have<br />
for long assembled 500 cars that<br />
cannot be sold.”<br />
He challenged the Federal<br />
Government to make up its mind<br />
as to what it wants to do and<br />
achieve.<br />
He added: “And as I have said<br />
at several occasions, no woman<br />
will deliver a child without going<br />
through pain and without<br />
losing blood, even if delivered<br />
by caesarean. If you ban the<br />
used vehicles now, the auto assemblers<br />
will be able to sell more<br />
and increase volumes."<br />
“Initially, it will be painful, but<br />
at the long run, prices of vehicles<br />
will come down, and today’s<br />
new vehicles will become<br />
tomorrow’s used vehicles. In<br />
other words, those interested in<br />
buying used vehicles will have<br />
them available in a matter of<br />
three, four years.”<br />
For Mr. Boyi, Managing Director,<br />
PAN Nigeria and Deputy<br />
Chairman, Nigeria Automotive<br />
Manufacturers Association,<br />
NAMA: “All government need<br />
do is increase tariff on used vehicles,<br />
assist Nigerian vehicle<br />
buyers by supporting vehicle<br />
finance scheme as spelt out in<br />
the policy, and as it was in the<br />
1970s and 80s’.<br />
“Let us look at what made the<br />
first auto policy work in the 70s<br />
and 80s. Had the government<br />
remained steadfast, there would<br />
have been no need for another<br />
auto policy."<br />
“And I will like to add that you<br />
do not just make imported used<br />
vehicles more expensive, also<br />
ensure that vehicle importation<br />
record is linked with vehicle<br />
registration. In other words, create<br />
a central record that will contain<br />
data of vehicles imported,<br />
for which the appropriate duties<br />
are paid. That will shut the<br />
door against vehicle smuggling.”<br />
Mr. Thomas Pelletier, Managing<br />
director, CFAO Automotive<br />
Equipment and Services Ltd,<br />
supported imposing higher tariff<br />
on imported used vehicles<br />
and asked the government to<br />
discourage automobiles from<br />
coming through the land borders.<br />
“It is not right for duties on<br />
imported used vehicles to be<br />
lower than that of brand new<br />
vehicles,” he argued. “Rather,<br />
custom duties on used and new<br />
vehicles should be at par.<br />
“Beyond that, there is a need<br />
to ban importation of used vehicles<br />
through land borders.<br />
And the Federal Government<br />
should create an enabling environment<br />
for auto finance.”<br />
Mr. Tokunbo Aromolaran,<br />
Managing Director, VON Automobile<br />
and Chairman<br />
NAMA, suggested progressive<br />
ban on used vehicles as<br />
the way forward.<br />
He said: “The fact is that it is<br />
abnormal to have a very small<br />
market such as we have at the<br />
moment. It is so because used<br />
vehicles are holding the chunk<br />
of the market. For the auto<br />
policy to succeed, used vehicles<br />
should not be competing<br />
with locally assembled vehicles.<br />
The least the government<br />
can do is impose a levy as envisaged<br />
in the auto policy.<br />
“Also, assemblers should<br />
come up with affordable cars,<br />
which can be churned out in<br />
numbers. At the same time, the<br />
government should ban used<br />
cars gradually, not at once.”<br />
He suggested a policy that<br />
would restrict importation of<br />
vehicles via the nation’s sea<br />
ports only.<br />
“Smuggling cannot be controlled<br />
if we continue to allow<br />
vehicles from Cotonou,” Aromolaran<br />
added.<br />
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