Innovictor
New Member
View attachment 44359
Late last month, some news reports posited that the Federal Government is set to begin the collection of 70% duty on used vehicles imported into the country starting January 1. The news reports, which turned out to be raising false alarms have misrepresented some stipulations in the new automotive bill in which the government raised the import duty on fully built cars from 22% to 70%.
However, the government was quick to dispel the rumors by coming out to say that the current 35% levy will be charged and that the new 70% levy had been deferred until April 30, 2015. The deferment of the new levy was necessary in order to allow local assemble plants reach optimal production levels that could meet the demand.
Interestingly, the Federal Government is working towards having automobile companies establish assembly plants in the country in order to discourage the importation of new vehicles. According to the provisions domiciled in the new automotive bill, any automobile company that sells more than 10,000 cars in Nigeria annually must establish a new local assembly plant or stop selling its cars in the country. The new automobile bill, which was prepared by the Federal Government, has already passed the second reading at the Senate.
Automobile Assembly Plants Underway
Based on the aforementioned stipulations, Toyota Nigeria Limited (TNL) must establish a local assembly plant in the country. It might interest you to know that TNL is a leading distributor of Toyota cars in Nigeria with annual sales of about 20,000. Stallion Autos, which is a major dealer of Honda automobiles, will also need to start assembling cars in the country.
The new automotive policy is already yielding results as ANAMMCO and Peugeot continues work on resuscitating the Peugeot Automobile Nigeria (PAN) assembly plants in Kaduna and Enugu. Hyundai, Innoson Vehicle Manufacturing and Kia have also started local vehicle assembly. In addition, other key automobile manufacturers that are expected to start producing and assembling cars in Nigeria include Tata, Volkswagen, Globe Motors and Coscharis Motors among others.
Key Benefits from the New Automotive Policy
Improvement in Our Balance of Trade
Judging by the number of new cars that imported into the country annually, one need not wonder why the country's balance of trade and balance of payments are in a sorry state. In addition, falling oil prices and the devaluation of the Naira means that the country will continue to conduct foreign trade at unfavorable terms.
However, the establishment of local assembly plants by the big automotive manufacturers will in turn reduce our imports. A reduction in imports will reduce our trade deficit and we can hopefully expect an improvement in the economy.
Provision of Jobs
The establishment of local assembly plants will be an avenue for job creation for many of Nigeria's jobless youths. These local assembly plants will need to hire many people for logistics, productions and sales. In fact, the building of the local assembly plants will also lead to a job boom in the construction industry.
New Cars will Become More Affordable
The establishment of local assembly plants (if executed properly) will make new cars more affordable for the average Nigerian. For one, the production costs will be reduced and the fact that a number of manufacturers will be competing for market share will encourage competitive pricing on new cars.
In addition, the cost of importing used cars will be expensive and almost equal to the cost of buying a new car of "almost" the same class. Hence, we expect a reduction in the importation of used cars as Nigerians delay instant gratification in order to buy a new car later down the road.
Late last month, some news reports posited that the Federal Government is set to begin the collection of 70% duty on used vehicles imported into the country starting January 1. The news reports, which turned out to be raising false alarms have misrepresented some stipulations in the new automotive bill in which the government raised the import duty on fully built cars from 22% to 70%.
However, the government was quick to dispel the rumors by coming out to say that the current 35% levy will be charged and that the new 70% levy had been deferred until April 30, 2015. The deferment of the new levy was necessary in order to allow local assemble plants reach optimal production levels that could meet the demand.
Interestingly, the Federal Government is working towards having automobile companies establish assembly plants in the country in order to discourage the importation of new vehicles. According to the provisions domiciled in the new automotive bill, any automobile company that sells more than 10,000 cars in Nigeria annually must establish a new local assembly plant or stop selling its cars in the country. The new automobile bill, which was prepared by the Federal Government, has already passed the second reading at the Senate.
Automobile Assembly Plants Underway
Based on the aforementioned stipulations, Toyota Nigeria Limited (TNL) must establish a local assembly plant in the country. It might interest you to know that TNL is a leading distributor of Toyota cars in Nigeria with annual sales of about 20,000. Stallion Autos, which is a major dealer of Honda automobiles, will also need to start assembling cars in the country.
The new automotive policy is already yielding results as ANAMMCO and Peugeot continues work on resuscitating the Peugeot Automobile Nigeria (PAN) assembly plants in Kaduna and Enugu. Hyundai, Innoson Vehicle Manufacturing and Kia have also started local vehicle assembly. In addition, other key automobile manufacturers that are expected to start producing and assembling cars in Nigeria include Tata, Volkswagen, Globe Motors and Coscharis Motors among others.
Key Benefits from the New Automotive Policy
Improvement in Our Balance of Trade
Judging by the number of new cars that imported into the country annually, one need not wonder why the country's balance of trade and balance of payments are in a sorry state. In addition, falling oil prices and the devaluation of the Naira means that the country will continue to conduct foreign trade at unfavorable terms.
However, the establishment of local assembly plants by the big automotive manufacturers will in turn reduce our imports. A reduction in imports will reduce our trade deficit and we can hopefully expect an improvement in the economy.
Provision of Jobs
The establishment of local assembly plants will be an avenue for job creation for many of Nigeria's jobless youths. These local assembly plants will need to hire many people for logistics, productions and sales. In fact, the building of the local assembly plants will also lead to a job boom in the construction industry.
New Cars will Become More Affordable
The establishment of local assembly plants (if executed properly) will make new cars more affordable for the average Nigerian. For one, the production costs will be reduced and the fact that a number of manufacturers will be competing for market share will encourage competitive pricing on new cars.
In addition, the cost of importing used cars will be expensive and almost equal to the cost of buying a new car of "almost" the same class. Hence, we expect a reduction in the importation of used cars as Nigerians delay instant gratification in order to buy a new car later down the road.