Nigeria News

Automotive Policy Deadly, Selective, Dealers Tell Senate Panel

Prominent automobile dealers Tuesday took their battle for a review of the National Automotive Policy to the Senate and sought its intervention to ensure a level playing field for all major players in the industry.
 
At a meeting called by the Senate Committee on Trade and Investment, chief executive officers of Toyota, CFAO, Honda, Mercedes Benz and Coscharis said the policy was designed to favour a particular firm to the detriment of others.
 
They had in a petition dated November 6 to President Goodluck Jonathan, implored the federal government to set aside “what is apparently an unfair action taken and request that a fair and level playing field be provided to all members of the industry”.
 
They also said there was no representation from the global manufacturers' representatives in the committee that drafted the automotive policy and therefore called for the constitution of a body comprising representatives of the federal government and stakeholders to review the policy and report back within six months.
 
They had alleged that one of their competitors, Stallion Group of Companies, was privy to insider information on the new automotive policy, thereby giving it unfair advantage over them.
 
The auto dealers had also warned that the federal government could lose about N134 billion in revenue due to a leak of the new automotive policy before it was announced.
 
But the Chairman/CEO of Stallion Group, Mr. Sunil Vaswani,   dismissed the allegation and challenged them to proper competition if they have the capacity to do so.
 
The automotive policy, which the Federal Executive Council (FEC) approved on October 2, was formulated to encourage local manufacture of vehicles and the gradual phase-out of the importation of used and new vehicles to save Nigeria about N1 trillion spent annually on the importation of vehicles.
 
Under the policy, the federal government hopes to fast-track the industrialisation of the country, reduce foreign exchange demands by importers of vehicles, and create thousands of jobs in the country.
 
In his testimony before the Senate committee, Chief Executive Officer (CEO) of Coscharis Motors, Mr. Cosmas Maduka, who was one of the signatories to the petition to the president, said he and his colleagues were not carried along in the implementation of the policy.
 
He said: "We have a policy on automobile industry that was signed into law by the federal government. 
 
"It is a good and laudable idea, but what we are saying is that enough time should be given to us because we just heard it overnight.  The policy was implemented the second day it was signed into law.
 
"This is about investment, we need to talk to our principals, the Toyota Japan, BMW Munich, KIA Motors of Korea and others. We need to carry them along on the new government policy.
 
"They will study the policy and tell us they were ready to do it. We need to come up with our own plan. Government said the policy had already started the day after it introduced the policy.
 
"To worsen the matter, one of the players in the industry has an insider information about the government policy which for us is criminal and within  24 hours, he went and registered Form M , which would enable him to import over 20,000 units of vehicles with the old duty.
 
"The rest of us who were not privy to the policy will be paying over 70 per cent to be able to import our cars. How do we continue to compete with him in the same market?  We want the affected competitor to pay the  same duty as applicable now or we are all given time to start the policy together.
 
"Fairness is what we are asking for.  We are against monopoly.  Transparent policy deserves a level playing field for everybody. Within the next two months, we know those who can start the business."
 
Responding, Minister of Trade and Investment, Dr. Olusegun Aganga, said discussions had begun on the matter as he pledged to carry all stakeholders along in the implementation of the policy.
 
"They will all be part of the implementation but they have to show a committed plan to start assembling. We would investigate the claims of one of them who allegedly imported vehicles overnight," he said.
 
He added that the aim of the policy was not only to set up automobile firms in Nigeria, but also to commence the exportation of auto parts to other part of the world, stressing that auto parts manufacturing firms would be established in three parts with a view to boosting Small and Medium Enterprises.
 
In his remark, Chairman, Senate Committee on Trade and Investment, Senator Odion Ugbesia, advised both the minister and stakeholders in the automobile industry to launch a revolution that can promote growth in the industry.
 
"We want a policy to create employment. The stakeholders have no problem with the policy. They want a level playing field.  They claimed that one of them had already imported more than enough vehicles. They want to be involved in the implementation of the policy," Ugbesia said.
 
Meanwhile, President Goodluck Jonathan yesterday announced the withdrawal of Mr. Benson Enikuomehin from the list of nominees to the Niger Delta Development Commission (NDDC) board he sent to the Senate last week.
 
He implored Senate President David Mark to replace him with Benson Adegbenro as representative from Ondo State. No reason was given for the replacement.
 
Also yesterday, the Senate suspended plenary in honour of a member of the House of Representatives, Raphael Nomiye, who died on Sunday.

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