Auto dealers lament low patronage during campaigns
•Allege politicians use fairly used vehicles for electioneering
Auto dealers in Nigeria have continued to lament poor patronage ahead of the start of the general elections tomorrow. Besides, they said most of the politicians and political parties have resulted to buying fairly used vehicles popularly called as ‘Tokunbo’ against expectations that auto sales would improve this year.
Specifically, patronage for new automobiles, be it passenger cars, commercial vehicles, vans, and even heavy-duty vehicles have continued to decline year-on-year, leaving stakeholders in a dilemma. Those particularly affected are stakeholders, who had upon the inauguration of the National Automotive Industry Development Plan late 2014, liaised with some foreign investors, to stake their resources in the emerging automotive sector.
The investors indeed came in their hundreds, hoping that the Federal Government was truly committed to the speedy development of the automotive sector, but no sooner had they staked their funds than they perceived some cracks in the policy, believed to have passed through the mandatory legislative process, and currently waiting to be accented by the executive.
To say the investors are in a dilemma would be an understatement, as majority of them have either given up hope that anything meaningful would come from the Memorandum of Understandings earlier signed with the local stakeholders, who are waiting endlessly for the executive accent.
Situations at the marketplace are still not promising, as transactions at the end of the third quarter of 2018 is nothing to cheer. In fact, the performance index by the end of 2018 did not usher even a reflection of hope, as majority of the emerging plants have had their most horrible year ever, downsizing workforce and underutilising their plants.
Stakeholders and auto dealers, who spoke with The Guardian with expectations that the electioneering process will impact sales of automobiles in the country, had their hope dashed as little or no impact had been felt. Principal Partner, Media Advocate Limited, an automotive resource and marketing communications company, Manny Philipson, said aside a staccato of above the line advertising, there wasn’t any serious injection of funds into other spheres of life.
Philipson said majority of the lower end populace and artisans who had thought opportunities would arise from the countdown to the election proper from brisk businesses from below the line advertisement were disappointed as not very many trade shows and organised supporter groups were inaugurated by the various political parties. He said indeed that hopes were dashed, and, so it was with other business ventures. Stakeholders in the automobile sub-sector were not expecting any meaningful patronage from the politicians, who ordinarily couldn’t leverage the economy in the last three and half years.
“A significant percentage of the automobile merchants came from purchases initiated by the corporate sector of the economy, with little or no demand from the financially-stifled public sector.” This electioneering process according to Philipson, did not in any way contribute significantly to the economy, and the situation was worsened by the Economic and Financial Crimes Commission (EFCC) constant trail of the well-heeled, allegedly believed to have benefited from the previous government. “I think this is the worst warm up to a major political dispensation we’ve had ever in Nigeria.”
Deputy Managing Director of Massilia Motors, Kunle Jaiyesimi, said it is an illusion to have expected improvement in auto sales from electioneering process because dealers are not feeling the impact of government on businesses. “Normally, January should have been a good month because of the expectations that they will pump in money compared to 2015, for some of us that sell pickups and buses, we had very good patronage from them especially our Chinese brands.
“Usually they will buy and rebrand but this time around, they patronise fairly used. For example, Lagos State APC previously buy new buses and rebrand them, but this time around they bought fairly used Toyota Sienna buses. Importers of new vehicles and even assemblers have not felt the impact of the electioneering process on our businesses.” He said: “When the auto policy was introduced, the National Automotive Design and Development Council (NADDC), threw the carrot that the 35 per cent levy will be used for auto finance, that they will work out something with the Bank of Industry (BoI), and some commercial banks whereby they will give out loans at single digits. But what we have seen is we have been paying the 35 per cent levy, and we are not getting the benefit. Some of us that are into assembly operations are affected the most.”
Head of Corporate Communications, PAN Nigeria Limited, Haroun Malami, said: “The speculation is different but what we are looking at is a change of government, change of political offices and public office holders, we believe there will be increase in volume. We believe during that time they will need brand new cars.
“There is not much purchase of cars as regards the electioneering process. In order not to account for more losses politicians try to keep it low, thereby patronising Tokunbo vehicles.”Comparing sales to the last election, Malami said: “We can’t judge the sales from the electioneering process, until after the election process, sales picked up between 2016 and 2017, and there was a downturn last year in the whole industry.
Marketing Manager, Dana Motors, Jimoh Olawale, said the electioneering period this year has had little or no sales on the auto sector. What was observed now is, rather than investing on new vehicles for electioneering process some of these politicians resolved to use the old cars that they have or perhaps patronising the used cars, which becomes affordable to them. If you check around some of the campaign trails, you hardly see newly bought cars in the fleet of their campaign trails.
Group Deputy Managing Director, Kewalram Chanrai, Victor Eburajolo, said the elections has not impacted on the auto business, money is tight. Buying new cars for Nigerians is a big problem and the institutional buyers are not doing well because everywhere business is tight. Sonu Singh of the Media and Marketing Department, Stallion Motors, Nigeria’s representative of the Korean automaker, said there has been no improvement in the sales of cars in the country owing to the electioneering process.
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