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Auto Policy: Hard times await importers, freight forwarders

By on January 3, 2015

 

As the federal government begins the implementation of the new auto policy this year, hard times await importers of used vehicles into the country. Also to be affected are concessionaires in the nation’s seaports who specialised in the receiving of used vehicles in their terminals.
Similarly, operators of roll on roll off (RoRo) terminals such as Grimaldi, which has its terminal at Tin Can Island Port Complex, Apapa, Lagos will face a lull this year as the Nigeria Customs Service (NCS) gear up to implement the revived national automotive policy.
THISDAY checks revealed that NCS will stiffen the collection of the 70 per cent tariff placed on automobile importations to discourage importation of used cars and new fully-built units.
It was gathered that the federal government is firm in the implementation of the new auto policy in order to create an enabling environment for local vehicles manufacturers to thrive besides building a more robust market for cars and buses being assembled in the country.
Over 80 per cent of vehicles imports to Nigeria are used vehicles. According to terminal operators, only an average of 50,000 new cars is imported into Nigeria through the seaports annually.
A Lagos base automobile dealer, Mr. Johnson  Nwachukwu told THISDAY that a strict implementation of the policy will lead to drastic drop in vehicle importation.
“This means that lesser fully built cars will be imported in 2015 and the number is expected to further drop in 2016 because many of the automobile companies’ representatives in Nigeria are now assembling cars and buses in the country,” he said.
Key industry players have also seen more automobile manufacturers setting up plants in the country this year.  Already, about 23 automobile firms have either begun assembling of vehicles in Nigeria or have plans to commence operations between 2015 and 2016. Some leading auto manufacturers setting up plants include Stallion Motors, which is already assembling some Nissan and Hyundai brands, PAN, Dana Motors, which will build some Kia and Renault brands in Nigeria.

According to Nwachukwu, with the current development, we expect that importation of completely knocked down units (CKDs) will give us significant market in 2015, but the problem here and which is the fear of operators is that not all the CKDs come through the RoRo terminals because they are  also containerised.
THISDAY had reported  RoRo terminal concessionaires have raised fears that the new auto policy indicates  some sort of  policy  somersault on the part of the government given the fact that  the same  government  had leased out the ports for 25 years concession to the terminal operators, who have made significant investments on the  terminals.
Many investors in the nation’s seaports, especially the concessionaires see the auto policy as a new  hindrance to their business only eight years into the concession contract.
The federal government had earlier in 2014 said the policy was part of the country’s effort to promote local manufacturing or assemblage of vehicles and to discourage importations of used vehicles.
In spite of the expected benefits from the implementation of the new policy, not a few stakeholders in the maritime industry, particularly importers and freight forwarders see it as a policy that Nigeria, nay Nigerians are unripe for.

 

 

[ThisDay]