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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 />

C<br />

M<br />

Y<br />

K

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