Vehicle imports drop by 50% as clearing cost soars

The Federal Government may be getting more than it bargained for with its new automotive policy as the volume of vehicles imported into the country has declined by 50% barely two months into the implementation of the new tariff on vehicles by the Nigeria Customs Service (NCS).

The NCS commenced implementation of the 35% duty on imported vehicles in May from its original 10%. The hasty implementation of the new tariff, which was earlier scheduled to commence July 1, 2014, resulted in protests by clearing agents operating at the Tin Can Island Port and PTML commands.

Investigations by SHIPS & PORTS DAILY revealed that as a result of the new tariff, importers and dealers of vehicles are not placing orders for shipment of used vehicles to Nigeria as expected.

“We are already seeing the impact as a shipping line. Less than half the orders that should have been placed this month have been placed. Nigerians may not have noticed yet but in a few months, it will be visible to all that importers are no longer willing to ship vehicles to Nigeria because of the high rate of import duty,” the agent to a shipping liner operator calling at Nigerian ports told SHIPS & PORTS DAILY on condition of anonymity.

During a live phone-in programme on Ships & Ports on Radio Nigeria One 103.5FM Lagos, callers expressed worries over the new automotive policy.

One of the callers, a freight forwarder and Director General of the Association of Nigerian Licensed Customs Agents (ANLCA) headquarters, Chukwudi Ike, said so-called local assemblers of new vehicles are deceiving the government.

“The issue is that government has not been able to check that most of these so-called manufacturing companies bring in assembled cars alongside the CKDs using the same platform of CKD (completely knocked down) pricing. You still see new cars rolling out from the ports. I think that government is not being realistic,” Ike said.

Another freight forwarder, Alhaji Idowu Owoade, who called from Tin Can Island Port, said the new auto policy will worsen the living condition of many Nigerians.

He said that the timing of the new automotive policy implementation is wrong as, according to him, it will take not less than five years to put in place the right framework for local manufacture of vehicles.

Owoade said that not only has the volume of imported vehicles declined drastically, the costs of clearing them have risen by as much as 50%.

“A 1999 Toyota Camry cleared before with N200,000 is now N300,000. A 2004 Toyota Camry cleared before N400,000 is now cleared with N600,000. And for a brand new vehicle, that one is unaffordable,” Owoade said.