The dwindling economic fortunes of Nigeria which has overseen an astronomical fall in the value of the naira is crippling businesses – the importation of fairly-used cars, popularly known as Tokunbo, being one of the worst-hit.
The once-highly lucrative business has, within last year, seen its light dimmed, with sales dropping to unprecedented low as it has been hit by the newly-introduced importation tariff.
Though the business has always been wrought with challenges, especially at the ports with the Customs Service, it has not been faced with anything like it is faced presently. This is evident in how dealers struggle to survive in the business.
With the introduction of the Automative Industry Policy by the Federal Government last year which introduced the high tariff, local manufacturers are being encouraged to produce Nigeria-made cars.
All these stack up against these businessmen who, despite their efforts, make minimal profit as attested to by them.
ENCOMIUM Weekly spoke with some Tokunbo car dealers in Lagos on the challenges of the business and how they cope…
TONIK AUTO, Agidingbi
I think the Customs duty the government is about implementing is one of the reasons we don’t sell like before. They want to increase it to 70 percent from 35 percent. Also, I think the rising price of the dollar is another factor. For those of us that import directly, it has become very expensive. I try to consider old customers. For customers’ sake, I can reduce my price, but that means small profit. I have tried not to change my prices too much. We still have very low patronage, everybody is crying there’s no money. You know the economy is bad. So, business is slow.
AUTOMATA INTERNATIONAL COMPANY, Alausa
I’m not in the mood. Did you see anybody shopping? We are not making sales. We are not happy. The tariff is high and it of course, affects prices. We cannot buy higher than before and still sell at the same price. We have reduced our prices to a reasonable amount but still…
OKOLI MOTORS, Alausa
Business is too slow, too dull. I am not happy. I am not even in the mood for your questions now because business is bad. The economy is affecting us very badly, especially with the dollar rising every day. We bring in cars, but we can’t sell them.
FIELD OF DREAMS, Alausa
The import tariff that they added last year has made prices go up very high; the elections, too. We don’t know who is coming in or staying, so everything is at stand still now. Nobody is buying anything now. If you ask them they will say it’s because of elections.
QUALITY MOTORS, Agidingbi
There are a lot of challenges we face like in any other business. You know there is no business without its own challenges. The new duty is one of them. Customers bear the final burden. We pay more so we sell at higher price. But we also try to consider them, too. And because of it, we don’t sell like we used to.
TEEDED MOTORS LTD, Agidingbi
Everything is now hard for us. Customers don’t come like before. The economy is eating into everybody’s pocket. Complain here, complain there. And if customers don’t come, there is no way we would sell. We have reduced our prices, still no change. Customers now prefer to buy new cars since there is only a small gap in prices.
U-CEE AUTO LTD, Agidingbi
We don’t face any challenge apart from that, we don’t make sales like before. A lot of things have changed. Before, in a week, I would sell at least seven cars even more. But now, nothing like that. Before, I used to clear cars with N100,000 or N150,000; but since last year when they increased the duty, it is double.
– MICHAEL NWOKIKE