Forgetting completely about the implications of the new automotive policy, which took effect from the first of this month, Mrs. Amaka Nwaneri called her friend in Florida, United States of America (USA), who is a car dealer to ship two vehicles to her.
Her current car, a Corolla DS, 1999 model which she bought through the same source for 2,000 US dollars (N320,000),shipped to Nigeria for about N160,000 and cleared at the port for N180,000 two years ago, was almost falling apart.
She and her friends have always found it cheaper to import cars from the US. With her meagre savings of about 8,000 US dollars, which is the equivalent of N1,320,000 at the rate of N165 per dollar She reasoned the money will cover the cost of purchasing the fairly used vehicles, plus the cost of freight and the clearing at the Apapa Ports.
Sure enough, within two weeks her friend called back that he had identified two vehicles, Toyota Corolla 2003 model for 2,600 US dollars and a GMC Endeavour Sports Utility Vehicle (SUV), 2003 model for 4,000 US dollars.
Happily, Mrs. Nwaneri now proceeded to remit money to her friend’s account in Florida. However, she called her clearing agent to intimate him of the development. Her agent gave her a shocker when he told her it was no longer business as usual. “With the implementation of the new auto policy, the costs of clearing vehicles at the ports have almost doubled,” he said.
Previously, the Toyota Corolla would have been cleared by the Customs for between N180,000 and N200,000, but since July 1st, it is now cleared for between N300,000 and N350,0000 while the SUV is now cleared at the ports for about N600,000, depending on the date of manufacturing, model and capacity of the vehicle. The freight or shipping cost, however, remains the same; that is between 1,000 and 1,500 US dollars.
After adding up the new clearing cost, freighting cost and other expenses which she may incur regarding the vehicles, it dawned on her that the money at her disposal would not cover her expenses. She would need more money in order to import the vehicles.
But she needed to change her current vehicle which keeps breaking down and letting her down whenever she needed it most. Moreover, she reasoned with the nature of her job, which requires her to be on the move, she cannot afford not to have a reliable vehicle.
So what other alternatives are left for her? She proceeded to the car shops but sadly realised that the prices were very high, so she went to the popular Julius Berger Bus stop along Apapa Oshodi Express way that is host to a thriving open vehicle market.
There, she saw an array of fairly used vehicles on display. She could buy her Toyota Corolla or any of such cars depending on the manufactured date, model and the general condition of the car for between N900,000 and N1,000,000 and she could also purchase a Lexus jeep (baby Oku), PathFinder, ecetera manufactured between 2002 and 2003 for about N1.4million or less.
From research, the prices of tokunbo vehicles at most open car markets, like Berger, have not really gone up or has not quite been fully affected by the new automotive policy.
In an interview with Mr. Chinagoron Nweke, the Secretary of the Julius Berger Car Union, he said this was so because the vehicles from Berger and most open car markets come through different sources, for instance the Benin Republic Port and not just through the Nigerian ports.
Realising that he may have divulged much, he refused further interview with the reporter directing her to other members of the association or the tokunbo vehicle market beside Gate Way Hotel, Ogun State or to Mazamaza Car market opposite Festac Town, Lagos.
However, further enquiries revealed that 99per cent of vehicles at the open car markets are imported through the Benin Republic Port; therefore the prices are not duly affected by the levies and duty at the Nigerian ports. But with the increased levies and duty, most car dealers and individuals may resort to buying cars from neighbouring countries with less import tariffs for better bargains.
However, the danger with patronising such dealers is that most of them pay the minimal duty at Benin Republic and when they bring the vehicle into Nigeria, they try to avoid paying the full duty and will not reveal that to the buyer. The buyer may be driving the vehicle within the town without knowing, but once he ventures onto the high way the vehicle gets impounded by Customs officials who would have discovered that the full duty has not been paid.
One of the car dealers at Berger who pleaded for anonymity disclosed that “the dishonest ones among us may file the forms for paying of car duty in Nigeria. If the cost is N100,000, the car dealer may deposit N10,000 with no intention to pay the rest and will hide it from the intending buyer.
“But this can only happen with fairly used cars from Benin Republic. If the vehicle is coming from the Apapa Port, the full duty and levies will be paid before the Customs officials may agree to release the vehicle, so buyers should be very careful when they go to the open car market,” he added.
Another alternative to owning a vehicle in Nigeria now is through car financing, explained Mr. Ohi Obadan of Skymit, one of the authorised Mercedes-Benz dealers in the country.
In an interview with Mr. Obadan at the corporate office of Skymit at 32, Mobolaji Bank Anthony Way, Ikeja, Lagos, he said that car financing is the easiest way of buying cars in the country.
Explaining, he said that it is a system where a consumer goes to an established car shop to work out with the dealer on the car to purchase and how to pay for the vehicle over a period of time while the vehicle remains in the custodian of the customer.
Giving an example, Mr. Obadan said that at Skymit, if a vehicle costs N1million, the intending buyer is asked to deposit 30per cent of the money and pay the remaining N700,000 over a period of 24 months at the prevailing bank interest rate.
Speaking on the new auto policy, he said it will encourage car smugglers and deny a lot of Nigerians who have sources of bringing cars from abroad the opportunity of owning a vehicle.
The federal government, determined to resume vehicle assembly plants in the country, decades after all plants except Peugeot Automobile of Nigeria (PAN) closed shops, has insisted on going ahead with plans to discourage vehicle importation from the 1st of this month.
The policy, among other things, stipulates that a fully built car would attract a duty of 35per cent and a levy of another 35per cent of the cost of the vehicle.
Many industry stakeholders doubt the workability of the policy, with some arguing that there are no such modalities as the necessary infrastructures, effective power supply, and access to affordable credit facility for effective implementation, amongst others.
However, the Managing Director, PAN, Nigeria Ltd, Ibrahim Boyi, said full implementation of the new auto policy would revolutionise the growth and development of the nation’s industrial sector.
Also, many auto manufacturers, both local and international, have lauded the initiative, saying it would be the best policy to have happened in the auto industry in the country.
Meanwhile, Mrs. Nwaneri is still not able to buy her fairly used cars as the money she budgeted for them before the implementation of the new policy can no longer cover the cost of two. So, maybe, she will buy just one.
