High Import Tariff Forces Car Import down by 70%

Automobile importers and dealers are currently experiencing a tough time as the implementation of the 70 per cent import tariff on cars is taking a heavy toll on their business.

The Federal Government had raised the import duty on cars (old and new) from 22 per cent to 70 per cent to discourage importation of vehicles under its National Automotive Development Plan.

For instance, the number of vehicles imported through the Roll on Roll off terminals of the Lagos port dropped by 70 per cent from 27,000 units in January 2014 to 8,000 units in January 2015.

One of the two major terminal operators for imported vehicles at the Lagos ports, Five Stars Logistics Limited, is said to be operating skeletal services, while the other, Ports and Terminal Multi-Services Limited, has reportedly laid off half of its entire workforce due to the low volume of car imports.

And to encourage the establishment of vehicle assembly plants, existing local auto companies are allowed to import completely knocked down parts at zero per cent as well as bring in a number of the fully built units at a concessionary duty rate.

Although the National Automotive Council said about 27 auto firms had signified their intention to establish assembly plants in the country, many have yet to start operation. Those operating are reportedly producing far less units than the local demand.

Source: Punch Newspapers

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