Fairly-used car dealers may close down business due to low patronage

The Chairman, Car Dealers Association of Nigeria, FCT Chapter, Ajibola Adedoyin, says the hike in the importation tariff on cars can cause many dealers to close down their business.

Adedoyin who said this in an interview on Tuesday said this could be as a result of expected low patronage.

“The implementation of the New Automotive Industrial Policy Development Plan of the Federal Government, which advocated the hike in the tariff of imported cars, is being rushed by the government.

“It is a fact that the policy is very good and has long-term benefits.

“However, implementing the policy now will amount to rushing into it without consideration for its consequence in view of the present situation in the industry,’’ he said.

Adedoyin said

increasing the tariff to 70 per cent means that small cars which cost N600,000 would now be sold for between N1.2 million and N1.3 million.

“Many people cannot afford these rates. ‘Tokunbo’ car dealers are the majority in the automobile sales in Nigeria. The association services the larger population of car users in the FCT for example. Out of 10 cars on Nigerian roads, eight are fairly-used (Tokunbo) vehicles.

“We deal with more than 80 per cent of the people who buy cars, and most states in Nigeria have a minimum of 500 car dealers and each car dealer has at least five people working for him.

“Allowing this teeming population back to the labour market will not augur well for the sector,’’ he said.

Adedoyin said the spirit behind the new policy was to eliminate fairly-used cars and replace them with “Made-in-Nigeria’’ cars.

“It is not possible for these car manufacturing companies we have in mind to take over production and provide this kind of employment within the shortest possible time.

“These companies would not provide a quarter of the employment of these people who are to be laid off under the present system,’’ he said

Adedoyin however pointed out that the roads are very crucial in the Nigerian transport sector, and banning “tokunbo’’ cars would also cause hardship to Nigerians using the road transport system.

“We urge government to first patronise “Made-in-Nigeria’’ products, for Nigerians to be able to gauge the durability and economy of the cars.

“Let there be competition in the sector so that people will have choice and variety at their disposal,’’ he said.

BusinessDay