Update:

9. Many people think this ban will not take effect. They believe the government will reverse
the decision at the last minute. Such people include a few Nairalanders I have heard from.
Unfortunately, their beliefs are based on gut feelings and not any concrete information.

Update:

10. We now have a sample picture of what the N1.2M made in Nigeria car might look like.
See picture below. Picture courtesy of Ndu Chuks.

solomon111: Don't be naive.
If it were another country,i would agree with you.
Unfortunately,this's Nigeria with all its inferiority complexes,unpatriotism and an utter disdain and disregard for locally made products.
I can assure you that as long as there's a readily available foreign alternative, Nigerians would never patronize the local manufacturers.
So,just giving the local manufacturers incentives alone will not do much for them as long as their targeted markets has been completly taken over by toyota and co.
The only way we can truly grow indigenous auto industry in NIGERIA is to go the hard way.

But govt should only propose increased tariff for existing manufacturing plants. As far as I know there is no single car assembly plant functioning in Nigeria. What we have are two truck and bus assembly plants: Innoson plant at Nnewi and NTM at Bauchi (not sure if NTM is still functioning).
There is absolutely no move or indication that the following importers: Coscharis (BMW, Range Rovers, Porche, Jaguar, Mini), Stallion Group owned by Vaswani brothers (Honda, VW, Audi, Skoda); Dana Group (importers of Daewoo and Hyundai), Toyota Nig Ltd (owned by Chief Adeojo), Globe Motors (Honda & Mercedes), Bras (Mercedes), RT Briscoe (Ford), SCOA (chevrolet and Nissan) have any car assembly plant under construction.

To make matters worse, govt begins to give them importation moratorium and waivers, they will simply sell at new prevailing elevated market prices once the new tariff kicks in, ripping off govt one side, and poor masses on the other.

We all know that the bulk of the cars bought by Nigerians are used cars, though the age are younger of recent. It will hit the poor and the middle class hard. Even prices of parts will go through the roof. So even if you own a car already don't rejoice yet.

The tariff increase should have been gradual, scaled to align with progress in construction and streaming of new car manufacturing plants.

Please note that objective of govt is not for manufacturers to invent new Nigerian brand of car, but to encourage importers to assemble at least the brands they currently import. So it has nothing to to with market already being taken over by Toyota and other known brands.

BizBooks: Update:

10. We now have a sample picture of what the N1.2M made in Nigeria car might look like.
See picture below. Picture courtesy of Ndu Chuks.

Why must it look SMART car posted by Ndu Chuks? Why cant it look like the Tata Nano which is even cheaper?

In any case, and with all due respect this is a wrong interpretation of this govt policy.
Please note that objective of govt is not for manufacturers to invent new Nigerian brand of car, but to encourage importers to assemble at least the brands they currently import.

cute-boy:

In any case, and with all due respect this is a wrong interpretation of this govt policy.

The government said brand new cars will be sold for N1.5M or less. But they did not
show pictures of the cars they have in mind. In the absence of that, we are using
our best judgment to predict the type of cars that will likely sell for N1.5M.

Certainly, you do not expect Toyota to sell a brand new Camry or Corolla for N1.5M
even if they were made at GEJ's hometown.

Update No 11:

I heard that a circular regarding the ban was passed around by the Nigerian Customs
recently. Unfortunately, my source did not get a copy. If you are a clearing agent in
possession of the circular, please share the contents with us.

BizBooks:

1. The ban appears to be the brain-child of Ngozi Okonjo-Iweala. But GEJ himself
gave the final approval.

BizBooks -
Not sure why you refer to it as a "ban". I sympathize that it may affect your business, but really Used cars are not in any way banned by the new rule, it just makes it more expensive to import a used or new car into Nigeria. I am not going to debate the logic behind the measure, because frankly I could argue a million ways for AND against! However, while the effective increase feels punitive, especially without a graduated implementation (small by small increase), I do hope that the end result is an improvement in the quality of vehicles being imported to Nigeria! All the junked and salvaged vehicles that end up on our shores are dangerous and frankly I am not sad to see the last of them!

A number of other countries have incredibly high customs duty rates also.

For those defending this new law I think you need to re-evaluate the intent and implementation of this law separately to understand why people are upset. Nigerians will gripe and groan about anything that'll cost them more but most will be okay with it if there is an eventual net gain for them even if it takes a few years. While the proposed plan/idea is good, the implementation is an absolute disaster waiting to happen.
I could explain it again but this video explains it better
https://www.youtube.com/watch?v=tM8bGPrKLXk

When everyone is allowed to play on an even playing field then Nigerians will buy into the idea but as long as the rich or "friends of government" are allowed to play on a level that gives them a significant advantage over the populace the outcry will only get louder. While I have no hard evidence I believe this will play out like the oil subsidy issue. Eventually they'll reduce the duty somewhere between 20% and 70% and declare a "compromise" has been reached while their original goal of monopolizing the auto industry market is still somewhat attained. Most civilized countries would never pass a law like this without providing significant research data to back up the NEED for the law and some public support. Where do we start a petition?

BizBooks: Please use this thread to provide updates on this topic as you see fit. Here are the
latest developments since our last major discussion:

1. The ban appears to be the brain-child of Ngozi Okonjo-Iweala. But GEJ himself
gave the final approval.

2* On the face of strong opposition from different quarters, Olusegun Aganga (the
Minister of Trade & Industry and a major supporter of the ban) said he will ensure
the ban takes effect with “every ounce of his being”.

3. The effective date of the new tariff is still unclear. There is no mention of the
subject on the website of the Nigeria Customs Service. You will expect to find such
information there, but sadly, it is not. At least I couldn't find it after a prolonged search.

4* Stallion Group (a major car importer) is alleged to have received preferential treatment
from the FG that will allow them import 20,000 cars over the next 3 years. They will do
so at the old duty rate of 20% and not 70%. A Senate committee is investigating the
allegation. Will anything come of the investigation? Your guess is as good as mine.

5* The Chairman of Coscharis Motors, Mr. Cosmos Maduka, said the new auto policy
was one of the best things that had happened in the country in recent times. (I don’t
blame Coscharis for saying this since he is among a select few that stand to reap huge
financial windfalls from the ban).

6* The House of Representatives has passed a resolution urging the FG to suspend the
ban on importation of tokunbo cars. Note that this is merely a resolution and not law.
So it will have little or no effect.

7* The Federal Government is claiming that after the ban, new cars will sell for N1.5M or
less. But nobody believes that. Just visit Punch Newspapers website and see what
Nigerians are saying on that.

8* Hon Dayo Bush-Alebiosu a member of the House of Representatives from Lagos urges
the government to put a hold on the ban on importation of tokunbo cars. He said it will
only favour "friends of government".

9. Many people think this ban will not take effect. They believe the government will reverse
the decision at the last minute. Such people include a few Nairalanders I have heard from.
Unfortunately, their beliefs are based on gut feelings and not any concrete information.

10*. We now have a sample picture of what the N1.2M made in Nigeria car might look like.
See picture below. Picture courtesy of Ndu Chuks.

11. I heard that a circular regarding the ban was passed around by the Nigerian Customs
recently. Unfortunately, my source did not get a copy. If you are a clearing agent in
possession of the circular, please share the contents with us.

More updates will be posted as they become available.

Disclosure: At the risk of sounding like a broken record, I have to once again disclose
that I sell tokunbo cars.

References:

2* http://www.manufacturingtoday.com.ng/2013/12/01/automotive-policy-clearing-the-fog/
4* http://www.punchng.com/news/automotive-policy-senate-to-investigate-allegation-of-information-leakage/
5* http://www.punchng.com/business/business-economy/govt-importers-agree-on-auto-policy-implementation/
6* http://www.punchng.com/news/reps-urge-fg-to-suspend-new-tariff-on-used-vehicles/
7* http://www.punchng.com/business/business-economy/made-in-nigeria-vehicles-to-sell-for-n1-2m-fg/
8* http://www.youtube.com/watch?v=tM8bGPrKLXk
10* https://www.nairaland.com/1573174/first-potential-look-n1.2million-nigerian

Op,

I strongly advice that you stop starting Political topics in Car Talk. If you have issues with Federal Govt. Policies, take the discussion or debate to Politics Section. Or you can as well as start such topics in Autos section, for matters that involve sales of automobiles.



Moderator

Any more posts here for or against Government or it's policies will be removed. Repeating the same offence will lead to a ban.


Moderator

Update No 12:

Txswat of Nairaland is reporting that the new 70% tarrif will take effect on January 10.
However, he did not provide a source for his information. We will find out on or after
January 10 if that is true.

Link: https://www.nairaland.com/1574300/new-import-duty

Mr moderator I think this post is appropriate in this section. This is a "car talk" section and we are discussing issues affecting the auto buying/selling industry. Please reconsider your "warning" and allow further discussion on this matter in this section.

Also I got a the memo of the 70% tarrif and I am trying to post it but file is too large 400KB. Anyone know how to attach a file that size?

txswat: Also I got a the memo of the 70% tarrif and I am trying to
post it but file is too large 400KB. Anyone know how to attach a file that size?

Send the file to me and I will re-size and post it here.

@bizbooks not sure how to send it to you but here are the attachments

Very Important Update:

A memo originating from the office of Ngozi Okonjo-Iweala stated that tokunbo cars
shipped after January 10, 2014 will incur the new 70% tariff. The shipment date will
be determined by the date on the Bill of Lading.

Here's the relevant portion of the memo:

With effect from 9th October, 2013, Form M and letter of credit must be established and
last shipment date evidenced by Bill of Lading dated on or before January 10, 2014.

This will come as a welcome relief to thousands of people including myself who have
cars arriving throughout January. As long as the Bill of Lading is dated before January
10, 2014 we appear to be fine. At least that's how I understand this statement though
it is a bit ambiguous. In my case, the vessel left the US on December 14, 2013.

See copy of memo obtained from Txswat of NL below. It was dated 14 November, 2013.

Nigeria need importation of Used and New Cars. Instead of the ban, Nigeria Government should have given the New Car Manufacturers subsidy, Tax Credit, and other ways to encourage them and help facilitate a close to fair ground. The New Car manufacturers can offer better Warranty, Support Services, and Government can encourage Bank to be more flexible with Auto Loans, Vehicle Tracking system, and many more ways for Customers to consider their product. Also, please make a good looking and durable Car Please.

ShodekConnect: Instead of the ban, Nigeria Government should have given the New Car
Manufacturers subsidy, Tax Credit, and other ways to encourage them and help facilitate
a close to fair ground.

The problem is that the new car manufacturers are not yet on the ground. They are
still making plans to build plants in Nigeria. Building a car manufacturing plant is not
child's play. It will take at least 3 - 5 years to come to fruition.

Update No. 14:

A delegation of the Road Transport Employers Association of Nigeria (RTEAN) met with
GEJ and requested "tariff waivers on all vehicles it imports".

Will the ordinary citizen get such waivers too? If waivers are given to one group, it should
be given to everybody else.

Source:
http://www.punchng.com/news/automotive-policy-will-not-inflict-hardship-on-nigerians-jonathan/

ShodekConnect: Nigeria need importation of Used and New Cars. Instead of the ban, Nigeria Government should have given the New Car Manufacturers subsidy, Tax Credit, and other ways to encourage them and help facilitate a close to fair ground. The New Car manufacturers can offer better Warranty, Support Services, and Government can encourage Bank to be more flexible with Auto Loans, Vehicle Tracking system, and many more ways for Customers to consider their product. Also, please make a good looking and durable Car Please.

They have given new car manufacturers all they have and all they can do now is roll dice on increased tarriff while Benin makes money

BizBooks: Very Important Update:
A memo originating from the office of Ngozi Okonjo-Iweala stated that tokunbo cars
shipped after January 10, 2014 will incur the new 70% tariff. The shipment date will
be determined by the date on the Bill of Lading.
Here's the relevant portion of the memo:

With effect from 9th October, 2013, Form M and letter of credit must be established and
last shipment date evidenced by Bill of Lading dated on or before January 10, 2014.
This will come as a welcome relief to thousands of people including myself who have
cars arriving throughout January. As long as the Bill of Lading is dated before January
10, 2014 we appear to be fine. At least that's how I understand this statement though
it is a bit ambiguous. In my case, the vessel left the US on December 14, 2013.
See copy of memo obtained from Txswat of NL below. It was dated 14 November, 2013.

I need help here. Can someone affirm the authenticity of this document? I have been hearing different stories about the new tariff. To me, FG is doing the right thing at the very wrong time.

haywhy80:
I need help here. Can someone affirm the authenticity of this document?

The document is authentic. Several newspapers referred to it but fell short of
posting the actual memo on their website. Below is a reference made by the
Guardian to the same document. As you can see, the take off date (January
10) corresponds with the date on the copy produced by Txswat.

"Through a letter to the Comptroller General of the Nigeria Customs Services
(NCS), Chairman of the Federal Inland Revenue Service (IFRS) and private
service providers at the country’s ports, she (ie Okonjo-Iweala) gave January
10 as takeoff date."

However, like you, I'm hearing other stories too. For instance, a source informed me
today that there will be a 3 month extension in the implementation of the new tariff.
But that has not been confirmed by any news outlet. So take it with a grain of salt.

Source:
http://ngrguardiannews.com/index.php/business/business-news/140484-automotive-assemblage-a-cloudy-new-policy

BizBooks, Txswat and others, you guys have done well. That attached document is exactly what i have been looking for. I finalized my container yesterday and the dock receipt shows Jan 6th. I just hope the date on the bill of lading will show the same. Will call my shipper to make sure. Thanks guys.

@Moderators,

Why was my response to Ikenna351 hidden? I have re-read a saved copy
of the response and it contained absolutely nothing that should cause it to
be hidden. People express strong disagreements with Seun everyday on NL
and their posts are not hidden. Why should this one be?

Please un-hide my response or for equal measure, hide the comments from
Ikenna351 that caused my response. Anything less will amount to censorship.

an average worker-middle class can not afford to buy a car for 1.2million,its a selfish policy-these politicians do not know that Nigerians have no savings-we are our own government...provide our own water,electricity,security-food is expensive,so how can one save 1.2million if not a criminal or corrupt person.

We should all revolt against this policy, though this is a good policy its so coming at the wrong time. I expect once the tariff increase start, there should be several local options but none yet. Even if the toyotas, hondas come set up a factory to assemble they still can't sell new cars for $9,500 which about equivalent to the N1.2m- 1.5m govt said, it wouldn't still stop or reduce foreign exchange rate because they still need bring their equipment from their base. I doubt if innoson sell their vehicles between below 1.5m. The Ministers of trade and finance really missed it on this.

Can anyone confirm if this is what the New Policy really implies:

In the event that Govt goes ahead with the new tariffs, how will it affect you? Let's take a look at this scenario. If we assume that at current rates, you need 220,000 Naira to clear a Toyota Camry, whose cost is 986,000 Naira (Total final Cost)

When the 70% increase kicks in, our agent at the port explained that this means there will be a 70% increase in the 220k thus bringing clearing cost to 374,000 Naira and Total final cost to 1,140,000 Million Naira. An increase of 154,000 Naira!!

distribute inc.:
an average worker-middle class can not afford to buy a car for 1.2million,its a selfish policy-these politicians do not know that Nigerians have no savings-we are our own government...provide our own water,electricity,security-food is expensive,so how can one save 1.2million if not a criminal or corrupt person.

What is your definition of middle class? For your info, the middle class are the highest spenders anywhere in the world.What is 1.2million naira.

solomon111: Nigerian rice is cheaper or at most, at the same price with the imported rice.
The only problem was that Nigerians chose the imported ones and abandoned the local rice.
What this policy is trying to achieve is to make the imported rice more expensive than the local rice so that Nigerians would then turn to the local rice.
So yes,increase in the price of imported rice is part of the overall objective.

Thai and Malay imported rice are more readily available and well-packaged hence the preference. I also think your analysis fails because the govt. hasn't attended to basics. In any case, I will keep crossed fingers.