Auto policy: Minister, DG, NADDC Disagree On Review Plan

• Jalal explains “missing” billions of 2% NAC levy

• New survival window for terminal operators

• New anti-smuggling policy under way

The Director- General and Chief Executive Officer (CEO) of National Automotive Design and Development Council (NADDC), Engr.  Aminu Jalal has disagreed with the Minister of Industry, Trade and Investment, Dr Okechukwu Enelamah, over the review of the National Automotive Industry Development Plan (NAIP), simply known as national automotive policy.

The Minister told a stakeholder forum in Lagos recently that the Federal Government would review the auto policy plan but in an interview with MMS plus, the Director- General of NADDC said that the review of the policy had since been concluded adding, “government is now committed to the implementation of the policy”.

Although the Minister, who acknowledged the auto sector as “key component of the Nigeria Industrial Revolution Plan (NIRP), aimed at diversifying the economy and increasing the manufacturing sector’s contribution to Gross Domestic Product (GDP),” called on the stakeholders to buy into the auto policy.

One major fear expressed by  the stakeholders, most of who have invested heavily in the policy, is the absence of legislative backing for the NAIP, a development some said makes it very vulnerable to policy summersault.

Disclosing that the launch of vehicle finance/ownership scheme will be done by the end of this year as part of the government’s plan to invigorate the policy implementation, Engr. Jalal noted that in 2014, Innoson Vehicle Manufacturing Company Ltd and VON Automobile, Lagos had vehicles costing 1.5 million naira which are now 2.8 million Naira as a result of the forex problem, adding, “note that all over the world, the cheapest car Nigerians would want costs, at least, US$ 10,000”.

According to him, the auto policy, since approved in October 2013, has attracted additional 15 auto assembly plants and body builders in addition to the 14 existing ones which were on the verge of closure.

Some of the companies are: VON Automobile, PAN Nigeria, ANAMMCO in partnership with (Chinese Shecman and Nigeria’s Transit Support Services( TSS), Leyland- Busan, TATA Motors, TVS is assembling motorcycles and tricycles in Nigeria

Asked what the NADDC did with the 2 percent National Automotive Council ( NAC) levy paid by importers for over two decades, Jalal asserted, “the levy was used to develop the industry. For example. N12.3 billion soft loan has been granted to 30 companies in the auto industry through the Bank of Industry (BOI)”.

Allaying the fear for scarcity of vehicles, which could arise as a result of production capacity of the local firms, he said that the total installed capacity now is 385,000, while the nation’s demand is about 400,000, including used vehicles.

On what the kind of soft-landing the government is proposing for the terminal operators who invested in the development of the terminals and ports for vehicle import before the policy reversal, Jalal ruled out any, saying auto policy did not foreclose the importation of fully built vehicles as they are still being imported.

Speaking on the spate of smuggling of vehicles at the land borders, which stakeholders noted as a major challenge to the policy, Jalal said the Federal Government would soon launch an anti-smuggling policy to minimize it.

Meanwhile, importers of used vehicles and car dealers have resorted to importing “accidented” vehicles so as to beat the 70 percent duty on new imported cars as stipulated in the auto policy of 2014

Findings reveal that accidented vehicles pay about 20% less duty of what a “clean” car pays.  The Nigeria Customs Service (NCS) authorities are already complaining about this as it has led to reduced revenue to the Service.

Explaining the place of the Small and Medium Enterprises (SMEs) in the auto policy, the Director- General of NADDC said that the local content manufacturing will provide opportunity for the SMEs.