New Auto Policy: FG Plans Financing Scheme to Help Nigerians Buy Cars

A combination of palliative measures, including the launch of a vehicle financing scheme is being planned by the federal government, to make funds available to Nigerians, for the purchase of vehicles under the new automotive policy, according to Olusegun Aganga, minister of trade and investment.

The scheme which will be launched in the next four months, involves collaboration of both local and foreign banks to make money available to prospective car owners at a concessionary rate of 10 percent.

Aganga is optimistic that the policy would provide opportuinity for banks to market prospective car owners, stressing that government was committed to providing a conducive environment for Nigerians to own cars assembled in the country.

The minister said the essence of the collaboration was to solve the problem of high interest rates charged by banks and also to ensure that Nigerians benefitted from the policy through employment opportunities and access to affordable and quality automobiles.

Already, about 12 companies including Nissan, Toyota, SCOA and Dana motors have signified their intention to participate in the scheme which will usher in made in Nigeria cars.

Also, the minister who briefed the press in Lagos on the progress of the policy since the commencement of the implementation last Tuesday, said payment for the vehicles would be spread over a period of four years.

He further explained that used cars had not been banned but would henceforth attract higher tariffs.

Acknowledging that the country was blessed with a young population and growing middle class, he said the policy was comprehensive, with other areas such as market development, skills acquisition, backward integration, quality and standard of the products, as well as auto component parts.

He added that the essence was to stop the over $3 billion spent annually on the imporation of cars, along with the adverse effects on the nation’s foreign exchange.

He observed that under the new policy, tariff on the cars is 35 percent for those that have made commitments to assembling them in the country, through acquisition of land, equipment and other infrasrtructure, adding that those that are bent on still importing used cars would pay an additional levy of 37 percent.

He further said that rather than ban the importation of used cars, as practiced in other countries operating similar policy, while tariff on completely knocked down (CKD) vehicles is zero since january this year, semi-knocked down (SKD) ones attract 5 percent and SKD (two) attracts 10 percent.

He expressed satisfaction with what has been achieved within this short period, and said government was happy with the level of enthusiasm shown by over 12 aumobile companinies, including Nissan and Toyota, among others that have signed on so far.

Also, he said the revival of Peugeot Automobile of Nigeria earler in the week and assemblage of made in Nigeria cars by Nissan recently, was a testimony to governement’s determination to ensure that many more Nigerians own cars.