By MOSES AKAIGWEPrice tags on cars and
buses are likely to go up by about 250 per cent
next year, following the introduction of new
fiscal measure by the Federal Government, as
part of the new development plan for the
country’s ailing auto industry.
A memo by the Coordinating Minister for the
Economy/Finance Minister, Dr. Ngozi Okonjo-
Iweala, on Thursday last week, to the
Comptroller-General of Nigeria Customs,
directed that imported fully built unit (FBU)
cars shall now attract 35 per cent duty and 35
per cent levy, totaling 70 per cent charges.
According to the document, the duty on buses
has also been raised from 10 per cent to 35
per cent without levy. Hitherto, imported cars
attracted about 20 per cent duty.
The minister’s directive dated November 14,
and also sent to Federal Inland Revenue
Service, pre-shipment agents (Cotechna
Inspection Limited and SGS Nigeria Limited)
and another agency, Global Scan Limited, said
approval for the introduction of the new fiscal
measures was given “by Mr. President.”
On the other hand, as part of the policy, local
auto manufacturers, like Innoson Vehicle
Manufacturing Ltd, Nnewi; VON Automobile
(formerly Volkswagen), Ojo; National Trucks
Manufacturers, Kano; PAN Nigeria, Kaduna
and other auto makers in the country, will no
more pay duties or levies on their Completely
Knocked Down (CKD) sets imported from their
overseas partners.
However, Semi-Knocked Down components for
the production of vehicles locally, shall attract
only five per cent duty without levy.
The circular, which was obtained exclusively by
Daily Sun, explained that the new measures,
coming about six weeks after the Federal
Executive Council approved a far-reaching
automotive industry development plan, were
designed to boost activities in the industry
and also attract foreign investments.
“The above measures are to create an
environment to support existing assembly
plants and attract other Original Equipment
Manufacturers who have expressed interest in
Nigeria”, the minister remarked.
However, while the automotive policy and
fiscal measures are being lauded by the
National Automotive Council, NAMA (the
umbrella body of local auto makers, and the
auto manufacturers themselves, importers of
fully built vehicles, have been crying foul.
Reacting to the new tariff regime, NAMA
Executive Director, Mr. Arthur Madueke,
described it and the development policy, which
as the best thing to happen to the industry in
many years.
Madueke, who has been in the forefront of the
manufacturers’ campaign for more stringent
duties on imported vehicles as is done in other
countries, said: “It has been long over due.
Nigeria cannot continue to be a dumping
ground for other countries’ auto
manufacturers. Nigeria has all it takes to be a
leading producer of vehicles. I, therefore,
commend President Jonathan for the courage
to approve the bold steps, and ignore protests
by unpatriotic people who do not want the best
for our industry.”
He listed some of the immediate and direct
benefits as employment for no fewer than 100,
000 Nigerians, and stimulation of investments
in the linkage industries, adding that with full
implementation and consistency, the industry
is capable of achieving 400, 000 jobs in the
next few years.
In their comments, both the Chairman of
Innoson Group, Chief Innocent Chukwuma and
the Managing Director of Proforce Limited a
vehicle armouring plant based in Ode-Remo,
Ogun State), Mr. Ade Ogundeyin, hailed “this
latest auto industry-friendly pronouncement
by government”.
Speaking to the Daily Sun yesterday, the
President of the National Association of
Government Approved Freight Forwarders
(NAGAFF), Chief Eugene Nweke, predicted
that the measures would reduce the volume of
jobs handled by his members as less cars are
likely to be imported from 2014.
According to Nweke, high levy and duty on
new cars, would further push patronage
towards imported second-hand (tokunbo) cars.
In his reaction, a very influential car importer
said the new fiscal measures and the auto
development plan are outrageous, citing a
provision in the minister’s circular which allows
an auto plant to import cars and buses and pay
the applicable duties without levy, as a guise to
give undue advantage to a particular
manufacturer that imports vehicles and also
owns a plant.
“It is either you are an importer or you are a
manufacturer”, the importer said. “The Trade
and Industry Minister said there is no going
back on the new measures, even as flawed as
they are. He has vowed that he would defend
them with every drop of blood in him. On our
part, we the vehicle importers will fight the
policies with the last drop of blood in us”.
Some car importers, including Elizade Nigeria
Limited, Globe Motors, Coscharis Nigeria
Limited, CFAO Motors, SCOA and Toyota
Nigeria Limited, under the aegis of Auto
Manufacturers’ Representatives Group in
Nigeria, had in a recent petition to President
Goodluck Jonathan, called for the reversal of
the new policy.
Meanwhile, there were indications yesterday
that auto showrooms might start any moment
from now to effect a gradual upward review in
their vehicles’ prices in response to the
minister’s memo, which they got wind of over
the weekend.
At a Kia showroom in Lagos, a source disclosed
that meetings were being held and prices of
other brands’ vehicles being monitored, “to
know when and by what margin to increase our
own prices.” The source also feared that that
the price of the base model of a Rio was likely
to rise by more than N3 million, from the
present N2 million by next year.
At a Toyota showroom, also in Lagos, a source
hinted of “a sharp price increase” on the cars.
“For example, paying 20 per cent duty, our
Camry is about N9 million now. But I can
assure you that when we reflect the new 70
per cent duty and levy, which represent about
250 per cent increase, Camry will be about
N20 million.


http:/sunnewsonline.com/new/national/car-prices-rise-250/

In every government policy some will be happy while some will be sad, but I think if this is handled properly the gain may outweigh the loss. God bless naija

Dis finance minister,would she be able to use any innoson car as part of her convoy?or even d president......i tink d continue to import standard autos for demslves at d high cost nd leav us with d so called manufactured in nigeria..........imagine toyota nw comming to manufacture a hilux hia..wit no power in d country.....na wa for naija

it will only make car theft and smuggling a highly rewarding business

As a building engineer, me 2 my fee has 2 go up........ Abi dem write magga 4 my forehead!!.