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Used Cars Endangered

Tokunbo_used-cars-edited

Stakeholders canvass the outright ban of importation of fairly used vehicles known as tokunbo into the country as part of measures to transform the Nigerian automobile industry

It is no longer news that Nigerians are the major importers of second-hand or fairly used cars popularly called tokunbo in local parlance. While the economy of the nation has doubled between 2007 and 2013, the number of Nigerians who can purchase brand-new cars is far less than those buying fairly used cars. This was the pathetic picture painted by speaker after speaker at the 2013 symposium organised by Automobile and Allied Product Sectoral Group of the Lagos Chamber of Commerce and Industry, LCCI, with the theme, Reversing the Used Car Trend: Unlocking the Potential in the Automobile Industry, in Lagos recently.

Doyin Salami, an economist and a lecturer at Pan Atlantic University, estimated the number of Nigerians who buy second hand cars at about 80 per cent. According to him, “the trend in the automobile industry is usually a reflection of a country’s national economy and technological advancement, and in the case of Nigeria, it shows we are far behind in the scheme of things.” He also estimated the number of Nigerians who can afford brand-new cars at one million, considered far too small for country with a population of over 160 million. Between 350,000 and 500,000 used cars are said to be imported annually, a situation which Salami said resulted in the collapse of the Nigerian automobile industry, thus retarding national growth.

Aminu Jamal, director-general, National Automobile Council, and Oseme Oigiagbe, chairman, Automobile and Allied product sector of the transport group of LCCI, corroborated Salami’s view. Jamal stated that Nigerians would continue to import used cars since Nigeria is not yet a car manufacturing country. He also decried the neglect of the automobile industry by successive governments, stressing that Nigeria as the second highest user of second hand vehicles, spent N150 billion in 2012, on the importation of vehicles, both used and new ones. He suggested that the current age limit of 10 to 15 years for used vehicles be reviewed to between five and eight years respectively.

Experts generally believe that the automobile industry in Nigeria has been greatly challenged by failure of the assembly plants to live up to expectation. While lamenting the various challenges being faced by the industry, Oigiagbe stated that the original purpose of technology transfer, skills acquisition, employment generation and industrial advancement for which the plants were established, has not been achieved due to policy inconsistency by various regimes.

Kayode Opeifa, commissioner for transport, revealed that the Lagos State government would soon unveil a new transport policy that would review the age of taxis to five years and ensure compliance with low emission and to checkmate theft.

Recently the Federal Executive Council, approved a new national automobile policy to, among others, end the importation of cars into the country. Announcing the decision, Olusegun Aganga, minister of trade and investment, said the policy was to encourage local manufacturing of vehicles and to enforce a gradual phasing out of used cars. The projection of government, according to him, is that with strict adherence to the policy, a brand-new car produced locally, would sell for less than N1.5 million, and with the coming on board of car manufacturing industries, a minimum of 700,000 jobs would be created. In addition, government envisaged that the policy would also encourage the revival of the petrochemical and metal/steel sectors and tyre manufacturing industries.

Stakeholders at the symposium, while admitting that they are not averse to the new policy, however, expressed concerns over the commitment of government towards ensuring implementation of the policy. They also would want government to fast track the provision of infrastructure that would enable the industry attain optimal production.

 

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