Two years after the introduction of a new automotive policy, which imposed a higher tariff on imported vehicles, a review may be in the offing. Reprieve appears underway for car dealers and buyers following plans by the Federal Government to review its import tariff on vehicles.

This is expected to bring down the cost of new vehicles and increase the tempo of business in the nation’s automotive sector. According to The Punch, Sources at the Federal Ministry of Industry, Trade and investment gave the indication on Sunday that the current 70 per cent tariff on imported cars could get a downward review as a way to force down the prices of vehicles.

Although the National Automotive Design and development Council, an agency under the ministry,said on Friday that 14 out of the 25 registered automakers had started assembling vehicles in the country, Nigerians have yet to enjoy the expected benefits of the new policy as the prices of vehicles are still high. Even car dealers have had to adopt different strategies to encourage buyers and boost sales.

The sources, however, said the planned review, which is in tandem with the change mantra of the Muhammadu Buhari-led administration, should not be interpreted as an outright cancellation of the auto policy, which was announced in September 2013.

“It is likely to come in the form of a review of the import tariff on vehicles so as make it easy for people to buy new cars. The decision on the entire auto policy is expected to be part of the economic policy of the government, which will be unveiled as soon as the new ministers settle down,” one of the sources said.

Car prices were increased last year by about 60 percent shortly after the import tariff went up from 22 percent to 70 per cent, a situation, which made it difficult for many to buy new cars, just as fleet buyers such as corporate firms have had to cut down on the number of vehicles purchased.
The imposition of the new import tariff, which also affects imported used vehicles, according to the government, is to encourage local assembling/production of vehicles, with the attendant benefits of creating more jobs and boosting the nation’s economy. A zero per cent was announced as tariff on imported vehicle components (Completely Knocked Down units)and auto assemblers are also allowed to bring in fully built vehicles at very low import tariff. But some stakeholders, including major dealers such as Toyota Nigeria Limited, had complained about the timing of the policy and the seeming poor state of the needed infrastructural facilities for the sustenance of local assembly plants.

The Chairman of the automotive group, Lagos Chamber of Commerce and Industry, Mr. Oseme Oigiagbe, confirmed that the group had written to the presidency and suggested a number of proposals on the implement action of the auto policy, and recently participated in some meeting sessions called by relevant government agencies/officials on the issue. In an interview with Punch correspondent, he specifically called attention to the issue of unstable power supply and the commencement date for the new import tariff as contentious issues that needed to be urgently reviewed.

Motoringnigeria.com

They dare not reverse the policy that is working now there are plants assembling cars just have to wait for the economic forces to kick in.

Are they implying that policy makers that the president signed off on are both clueless about the economy?

When a dulllard is on d throne,d economy suffers.
This senile demented man is busy reversing all d gains GEJ made in d economy .
I will not be surprised if this whole thing is targeted at d so called 5%ers,
Afterall,Innoson is d only "indigenous" car manufacturer as at today

dokiOloye:
When a dulllard is on d throne,d economy suffers.
This senile demented man is busy reversing all d gains GEJ made in d economy .
I will not be surprised if this whole thing is targeted at d so called 5%ers,
Afterall,Innoson is d only "indigenous" car manufacturer as at today

I hope a report will come out showing the total output of the new automotive industry to prove that the policy is on track and thousands of jobs have been created in the industry

If this policy summersault is done, then we are back in the doldrums again. The so-called new vehicles being brandied about are mostly assembled in South Africa. What's the population of SA? How many cars do they sell in SA? Yet, almost all car makers have assembling plants/units in SA, assembling cars there that would eventually end up in Nigeria.

The gains of this policy are already being felt. Assembly plants are springing up and people are getting employed in these plants. With a year or two more, many of these plants would start rolling out their products and now they want to kill it even before it takes off. Haba! Nigeria. Which way?

Macroeconomic policies are not usually being felt in a year or two. It takes a minimum of at least 10 years for you to be able to tell whether the policy had achieved anything tangible or met its target or even getting close to it. This is barely 2 years and we are already going back again. Nothing good comes easy.

The long run is always better and more valuable than the short run which gives immediate gains but are usually useless, detrimental and wasteful when compared to the long run in the long run...

FlyboyZee:
If this policy summersault is done, then we are back in the doldrums again. The so-called new vehicles being brandied about are mostly assembled in South Africa. What's the population of SA? How many cars do they sell in SA? Yet, almost all car makers have assembling plants/units in SA, assembling cars there that would eventually end up in Nigeria.

The gains of this policy are already being felt. Assembly plants are springing up and people are getting employed in these plants. With a year or two more, many of these plants would start rolling out their products and now they want to kill it even before it takes off. Haba! Nigeria. Which way?

Macroeconomic policies are not usually being felt in a year or two. It takes a minimum of at least 10 years for you to be able to tell whether the policy had achieved anything tangible or met its target or even getting close to it. This is barely 2 years and we are already going back again. Nothing good comes easy.

The long run is always better and more valuable than the short run which gives immediate gains but are usually useless, detrimental and wasteful when compared to the long run in the long run...

South Africa has the biggest car market in the whole of Africa, hence all car makers have set up assembly plants or manufacturing plants in SA. Do your research. Big population dont mean nothing, its the buying power.

Nice one
I wonder who will buy a used car when you can afford a brand new one
With this minimum wage how many people can afford 2m naira cars
The clearing price should be reduced considerably

14:


South Africa has the biggest car market in the whole of Africa, hence all car makers have set up assembly plants or manufacturing plants in SA. Do your research. Big population dont mean nothing, its the buying power.

I wrote as a researching economist and not some bloke looking out to buy cheap cars or support the government for whatever reason. From the onset of this policy, I have always made my points known and maintained same. You can revisit such threads, I believe they would be in the archives by now to see my points of argument and school of thought...

From your statement, it shows you don't understand a thing about macroeconomics, economic growth and development. In the past, South Africa deliberately made policies that would ensure that production of not just cars but most consumer goods take place within their country and the excess not consume is exported. This creates an environment for innovations and investment leading to economic growth and development. The gains are usually not instant but are very lovely and long lasting as soon as they start rolling in.

Obasanjo, during his tenure as President stopped Coca Cola from importing already package 5 Alive fruit juices when he discovered that the entire production of 5 Alive is done in SA with an objective to be sold in Nigeria. This forced the Coca Cola company to start producing in Nigeria, Chi also keyed into that to expand their production in the fruit juice market and some other companies too also benefitted, thereby creating jobs and income streams in supply chains, production, marketing and ancillary services.

Nigeria is an important destination for most investors because of one major thing, our population. The total number of brand new cars bought in SA in a year will not satisfy the Nigerian market in 3 months and yet you think population is not important? Yet, most brand new cars bought in Naija are made in SA? And yet, almost all car manufacturers have plants in SA...

Before this policy was even contemplated, statistics and data would have been collected for years to show that there is ready market for the finished product. Moreover, the gains of this policy in terms of job creation, development of new income streams, technology transfer, availability of genuine spare parts, etc, outweighs buying cheap cars by far by far.

Lets even put Benin Republic into perspective. The only reason the used car importation business is thriving in Benin (Cotonou) today is the Nigerian market which is a direct consequence of its population. When making production and marketing plans and investments decisions, my brother, population is very important...

FlyboyZee:
If this policy summersault is done, then we are back in the doldrums again. The so-called new vehicles being brandied about are mostly assembled in South Africa. What's the population of SA? How many cars do they sell in SA? Yet, almost all car makers have assembling plants/units in SA, assembling cars there that would eventually end up in Nigeria.

The gains of this policy are already being felt. Assembly plants are springing up and people are getting employed in these plants. With a year or two more, many of these plants would start rolling out their products and now they want to kill it even before it takes off. Haba! Nigeria. Which way?

Macroeconomic policies are not usually being felt in a year or two. It takes a minimum of at least 10 years for you to be able to tell whether the policy had achieved anything tangible or met its target or even getting close to it. This is barely 2 years and we are already going back again. Nothing good comes easy.

The long run is always better and more valuable than the short run which gives immediate gains but are usually useless, detrimental and wasteful when compared to the long run in the long run...

One thing is evidence here and that is there is need for this govt to focus more on putting infrastructural facilities in place like electricity,good road,rail systems to urgument the road and other amenities.

Then those policies will naturally be complimented with the aforesaid and the rest is history.

Thats my little understanding of macro economics indices

kunle75:




One thing is evidence here and that is there is need for this govt to focus more on putting infrastructural facilities in place like electricity,good road,rail systems to urgument the road and other amenities.

Then those policies will naturally be complimented with the aforesaid and the rest is history.

Thats my little understanding of macro economics indices

My bro, well spoken but I beg to differ. It is well known that success has no excuses but failure is riddled with excuses...

Okay, macroeconomics apart. Looking at every day's reality in the eye now. We don't have roads, but we can import cars both used and new and drive them around here without qualms. That is okay, right? But, we can't encourage manufacturers to come do the assembling here. Hhmmmmm! If car manufacturers begin to make cars in Naija, they may begin to think of making cars that would be most suited and adapted to our roads and environment, I hope you are taking that into perspective.

Almighty electricity. Technology in car assembly as gone beyond the point where you need all the megawatts in Naija to assemble a car. No major components are manufactured here. The bottom line is to bring these cars in knockdown form and assemble them here. Yet we make a lot of ish as if car assembling is rocket science.

Other infrastructures. I hope you do understand that we used to have car assembling plants in Nigeria back then in the 70s and 80s, assembling cars that were well adapted to our roads and environment and people were buying brand new cars even when the average middle class then were poorer than the average middle class now and even more so with an expanded middle class now. It is the increased patronage of imported used cars that killed those car assembling companies in Nigeria.

It is never too late to start afresh. That new auto policy would have done something like a reset on our car industry and we would have been looking up to picking the pieces from where we left off in the '80s. But, I believe with this summersault we'll only be postponing our take-off date, thus remaining where we are and going cap (plate) in hand beginning other nations for reprieve. I weep for my beloved country...

Cars are the second highest imported items in Nigeria today right behind finished crude oil products at the number 1 spot. Reversing this policy simply means higher car import which will further devalue our naira, more cars on the road which will cause higher demand on Pms too. This step will not make sense at all and this is beside the progress noted in the automobile industry with several proposed assembly plants on the rise.

Oga Buhari should think hard o

The failure of the system resulted in the PMS issue mode of transportation is the only issue the people can take care of on their own, and part of a developing economy is the use of more fossil fuel as source of energy.

The govt has not taken any measure to create alternative mode of transportation neither have they used the money accrued from tariff to improve any part of the sector now it has collapsed to a point where the concept of a road is laughable by modern standards