Auto dealers reduce vehicle imports due to incessant fall in Naira

The anticipated surge in the importation of used vehicles into the country is not manifesting less than two months to the commencement of the payment of 35 per cent levy on such vehicles.

Investigation by our correspondent revealed that the devaluation of the naira and the subsequent free fall of the currency against major world currencies had significantly raised the cost of buying used vehicles and clearing them at the nation’s seaports.

It was learnt that though a lot of Nigerians still desired to buy second-hand vehicles, popularly referred to as Tokunbo vehicles, auto dealers had reduced their volume of importation by over 50 per cent due to escalating costs and the failure of many target buyers to commit huge expenditure outlays at this period.

It was gathered from dealers at the Berger Yard Auto Market along the Apapa/Oshodi Expressway in Lagos that most of them had resorted to routing their imported vehicles through the Cotonou port in the neighbouring Benin Republic in order to remain in business.

The Central Bank of Nigeria had on November 25, 2014 devalued the naira by eight per cent due to the falling prices of crude oil in the international market, with the currency’s exchange value to the United States dollar moving from 155 to 168.

Ever since the announcement of the devaluation of the currency, the naira has been on a free fall, reaching an all-time low of 200 against the dollar last week Monday at the CBN’s interbank market. In the parallel market, the dollar is currently selling for about N213.

As a result, our correspondent gathered that most auto dealers were holding back on used vehicle importation because it was becoming increasingly difficult for them to raise the requisite foreign exchange, while those who were able to had to come up with more naira.

The dealers complained of poor sales, adding that most people who had shown interest in purchasing the vehicles had to abandon the idea because of the rising prices.

Credit: Comfort Oseghale/Punch