Auto dealers want ban on importation of vehicles across land borders

Despite indictment of abuse of the auto policy by dealers and manufacturers, stakeholders in the industry have advocated ban of vehicle importation across the nation’s land borders.

The dealers did not offer any alternative on meeting demand for domestic vehicles should their request be granted. They cited huge drop in capacity utilisation of their plants, dominance of used vehicles, poor financing of vehicle ownership schemes, implementation of the Common External Tariff (CET) and smuggling across the land borders, especially the Seme-Badagry border, as basis for the request.

The stakeholders, who spoke, yesterday, at the yearly symposium organised by the Automobile Group of the Lagos Chamber of Commerce and Industry (LCCI) in Lagos, urged the Federal Government to effect the ban in an effort to curtail smuggling and abuse of the auto policy by some operators.

While acknowledging challenges in the auto sector, the Nigeria Customs Service (NCS), however, indicted some of the operators for abusing concessionary duty rate by importing different brands against the ones approved.

It added that some were also guilty of importing above the quantity approved by taking advantage of gaps created in the policy review of 2009.
 
Besides, the NCS advocated mergers and acquisitions of assembly plants in Nigeria, noting that 44 assembly plants were too ambitious, considering the reality of the economy and output of the plants.
  
The NCS import data indicate that the nation’s automotive industry currently assembles only reasonable quantity of commercial vehicles, as the installed capacity of the industry is below the country’s yearly demand of vehicles, with cluster factories that supply vital components already shut down.
  
The NCS argued that the present situation where the 44 assembly plants produce less than three per cent of their installed capacity makes mergers and acquisitions a viable option.

The agency added that such a move would resuscitate cluster industries that would support the sector, as part of measures to reduce production costs, attract investments in local content production and create employment.