Signs point to the possibility of a shortage of foreign-owned cars, or tokunbo cars, in the nation as dealers lament import challenges.
Speaking with The PUNCH in Lagos on Monday, auto dealers attributed the most recent development to the high exchange rate, which had an impact on the duty rate among other things.
Olaniran Adelana, the state secretary of the Lagos State Motor Dealers Association, stated that it was challenging to sell the older vehicles since they were unsure of receiving new ones.
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We are finding it more difficult to buy cars the way we used to—from Europe—due to the exchange rate between dollars. Additionally, the frequent depreciation of the naira is making it difficult for us to sell our old stocks, he explained.
Adelana stated that the present difficulties had caused some dealers to go out of business and that the naira’s recent increase versus the dollar was negligible.
Restocking was a significant problem, according to Mr. Chinonso Amaraiwu, another Chimex Motors auto dealer at Berger Car Mart, even though car sales had progressively increased.
“Sales of cars are gradually increasing, but replacing the ones that are sold is currently the biggest obstacle. Due to the numerous difficulties associated with importing vehicles, such as the duty required on imported vehicles among other issues, cars are no longer entering the nation as they once did.
Many importers are being discouraged from entering the vehicle import market by the duty. People will soon find it extremely difficult to purchase automobiles, particularly tokunbo vehicles, as they are no longer arriving in the same manner as they did previously, he claimed.
“The high cost of importing tokunbo cars is associated with the exchange rate,” stated Chibueze, a car dealer from Lagos State’s Amuwo-Odofin Area. For example, you could sell your car for its current price of, say, N6 million, and then discover that you can’t get the same car for that amount when you want to bring it in.