Auto Assembly Companies Requests N100 billion Intervention Fund from FG to Facilitate Vehicle Acquisition

The automotive industry has made an urgent request to the Federal Government for a N100 billion intervention fund to be injected into the vehicle financing scheme. This financial support aims to stimulate the purchase of new vehicles by Nigerian citizens and revitalize the automotive sector.

It was asserted that this would also expedite the revitalization of the nation’s economy.

During the Nigeria Auto Industry Summit in Lagos, the Minister of Industry, Trade, and Investment, Dr. Doris Uzoka-Anite, emphasized the significance of the automotive sector in revitalizing Nigeria’s economy and establishing the country as a prominent automotive manufacturing hub in Africa.

Also, the Director General of the National Automotive Design and Development Council (NADDC), Joseph Osanipin, addressed the gathering, “Nigerians” reliance on imported vehicles is putting pressure on the nation’s foreign exchange market and job creation.”

He noted that the value of imported passenger cars experienced a significant surge in 2023, reaching N1.47 trillion, which represents a substantial increase of 224.67% compared to the previous year, as reported by the National Bureau of Statistics.

In his remarks, Wale Adeniyi, Comptroller-General of Nigeria Customs Service, NCS, said the proliferation of used cars in Nigeria was further weakening the naira and straining the local manufacturers in the country.

“The Nigeria car market is dominated by used vehicles imported from all over the world. These vehicles are cheaper and more affordable than their brand new counterparts and locally assemble vehicles. These abundant and affordable used vehicles dampen demand for new locally assemble cars, hinder growth in domestic industry” he said.

The summit was organised by the Nigeria Auto Journalists Association, NAJA, in collaboration with the National Automotive Design and Development Council, NADDC, with the theme, ”Developing Nigeria‘s Economy through the Auto Industry.”

The ex-Director of NADDC, Mr Luqmam Mamudu, Head Sales, Marketing and Logistics at Honda Automobile Western Africa Ltd, Remi Adams, and General Manager, Marketing & Corporate Communications at Coscharis Group,  Abiona Babarinde, sought urgent government’s intervention in the auto finance scheme in order to keep the industry going.

According to Adams, the federal government has on a number of occasions, failed to keep its promise of bringing in commercial banks, including a foreign bank, to handle a proposed auto finance scheme, using funds pulled from levies collected on imported vehicles.

Mamudu lamented that only two per cent of vehicles assembling capacity in Nigeria put at 500,000 vehicles per annum, was currently being utilised.

He stressed the need to create the needed demand for such new vehicles and others through a sustainable auto finance scheme.

“Government should create an intervention fund of N100 billion for provision of affordable vehicle acquisition loans,” he said.

While Mamudu wants the loans directed only to commercial vehicles fleet operators initially to flood Nigeria with shared car services, buses and trucks, others said it should be made open to all intending new vehicle buyers.

“Credible mobility  private credit companies with verifiable track records in Nigeria should be identified and invited to participate in this revolving loan scheme.  The scheme should  be supervised by Security and Exchange commission, SEC,” he stated.

The stakeholders also called for adequate management of used vehicles importation through tariff to allow for consistent development of the nation’s automotive industry.

With regard to the revitalization of the industry, Mr. Benedeth Ejindu, a board member of the Nigeria Automobile Manufacturers Association, emphasized the critical importance of enacting the National Automotive Industry Development Plan (NAIDP) bill into law. This legislative action is essential for fostering investor confidence and reinvigorating the sector.

It Is noteworthy that the Federal Executive Council (FEC) granted its approval to the NAIDP in May 2023. The implementation of this comprehensive plan is anticipated to generate one million employment opportunities and mandate governmental entities and companies engaged in government contracts to prioritize the procurement of locally manufactured vehicles..

July 01, 2024