Car importers lose 90% of business in 2016 to recession
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Car importers lose 90% of business in 2016 to recession

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Car importers lose 90% of business in 2016 to recession

Nigeria is yet to fully compute all business opportunities it suffered in 2016 due to recession, as stakeholders in the automobile sector say they suffered about 90 per cent business losses in the period under review.

They attributed most of the development to scarcity of dollars, which made it impossible for them to back up their purchases with the required foreign currencies.

This was made known to newsmen in Lagos on Monday by the Managing Director,Toyota Nigeria Limited (TNL), Mr Kunle Ade-Ojo, at the quarterly press briefing on the activities of the auto mobile sector in Nigeria.

According to him, the situation the sector faced in the past two years could have been different had the authorities revisited the high duty on imported vehicles, which also caused increase in selling prices of the commodity.

He said the sector also witnessed a high percentage decline in patronage as a result of high price of brand new vehicles

Ade-Ojo said despite the gloomy state of the economy, the sector had projected total vehicular sales for 2017 to between 8,000 and 10,000 units.

According to him “The cheering news for the sector is that organized auto-based companies will still have the lion’s share of vehicles to be imported into the country.

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“The devaluation of naira, which caused scarcity of forex affected businesses and importation last year. For instance, in the first quarter of the year, the dollar was just about N200, and by the end of the year, it had doubled.”

“A lot of businesses could not pay for the increase. Many companies retrenched and had to prioritize what they will spend their little funds on.

“It used to be every four years companies change their staff cars but that has been increased to five years and above. Interest rates have gone up on loans for doing business.

“Dollar is scarce and same for naira. And while the Central Bank of Nigeria is saying it is releasing money, banks are saying there is no money. Customs import duty which had gone up also contributed to high cost of vehicles,” Ade-Ojo said.

However, the drop in importation of vehicles, the Toyota boss said, was not peculiar to 2016 alone though the trend which started like three years back, became more significant that year.

He said the total number of vehicles imported into the country in 2015 was 18,000, but dropped to 7,000 in 2016, while the total retail market, he said dropped steeply by about 42 per cent from 32,000 units in 2015 to 18,000 in 2016.

 

 

 

 

 

 

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