Car prices to increase as Govt places higher tariff on vehicle imports

 

As part of a new automotive policy, the Federal Government has increased the tariff on cars imported into the country.

The plan, approved by the Federal Executive Council takes effect immediately and affects every car which is imported into the country after October 3rd, 2013. Concessions are being made to those car buyers/dealers who opened a Letter of Credit for the car import before October 3rd.

Minister of Trade and Development, Olusegun Aganga, confirmed the development to journalists in Abuja.

“The importation of Tokunbo vehicles will not be a major threat to the automotive development plan. The tariff for the importation of cars has been reviewed upward and will be announced soon,” he said.

He added, “In many countries around the world, the automotive industry plays both strategic and catalytic roles in economic development, particularly in employment creation and wealth generation.

“With our current population and economy, our potential vehicle market is about one million vehicles a year. This is more than sufficient to support an automotive industry.”

“Recognising the strategic effects of the automotive industry in industrialisation, emerging economies like Brazil, China, Malaysia, India, Iran, Indonesia, Thailand and South Africa took deliberate steps to develop their automotive industry between the 1960s and 1980s.

“Nigeria started about the same time in the 1970s. These countries have, however, developed well advanced automotive industries now in contrast to Nigeria. The Nigerian auto development plan will promote investments in the assembly of inexpensive cars in the country at prices, which Nigerians can afford, and will gradually substitute the large and growing car imports coming into the country.”

Also speaking on the issue, the DG, National Automotive Council, Aminu Jalal, said Nissan, Toyota, General Motors and others were conducting a feasibility study on vehicle assembly plants in the country.

The said, “Nissan, Toyota and others are now conducting a feasibility study on vehicle assembly in Nigeria.

“At full capacity, the Nigerian automotive industry has the potential to create 70,000 skilled and semi-skilled jobs along with 210,000 indirect jobs in the Small and Medium-scale Enterprises sector that will supply the assembly plants.”

He added that importers could still clear imported vehicles at the old rates until February 28, 2014, provided “they can prove that they had opened a letter of credit for the vehicles before October 3, 2013.”