FG Urged to Stop Influx of Used Cars from China

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Chairman, Motor Vehicles & Miscellaneous Assembly Sectoral Group of the Manufacturers Association of Nigeria (MAN), Dr. David V. C. Obi, has urged the federal government to stop the Chinese from dumping used vehicles in Nigeria because of the dire effect it would have on the nation’s auto industry.

There has been sustained shipment of used vehicles from China to Nigeria in recent times, a move Obi sees as counterproductive to the development of Nigeria’s auto industry, adding that the government could halt the trend or impose heavy duties on the vehicles.

Obi said the “Chinese gift” was not only shocking, but would also amount to opening the floodgates for used vehicles to submerge the local industry.

He said that when the impending ‘Chinese used car Armada’ is viewed alongside the rejection of the auto policy bill by the Presidency, what has befallen the auto industry can be described as “double tragedy.”

Obi, who is the Chairman of DVC Group, which plays vital roles in the auto industry, warned that if allowed to flood the local market, the used vehicles from China would finish the damage the influx from Europe and America have been inflicting on the local industry over the years.

The Chinese Ministry of Commerce announced recently that a state-backed company in Guangzhou had officially shipped used cars to Cambodia, Myanmar and Russia with Nigeria as one of the major destinations for the first batch of 300 units.
The export, it was reported, was expected to deepen implementation of China’s Belt and Road Initiative (BRI), promote the stable growth of foreign trade, and increase demand for new vehicles in that country.

But, Obi warned that with the ban on production and sales of fossil fuel vehicles by Chinese provinces, European countries and other parts of the world, taking affect in a few years, Nigeria should not open its borders for the dumping of disused vehicles from industrialised countries.

China is said to have an estimated fleet of more than 300 million privately-registered vehicles, the largest in the world.
“I was shocked. I was alarmed,” Obi stated. “Everybody knows that once China joins the used vehicles shipment to Nigeria, we are finished. Moreover, the shipment is an official initiative of the Chinese Government and will be sustained over many years, which means that millions of vehicles driven in China will end their life-spans in Nigeria as the Chinese look forward to electric cars.

“Luckily for them, we are relieving them of the burden of disposing of vehicles they can no longer use. But, unfortunately for us, our government does not seem to know the implications of allowing this kind of dumping; one of which is stifling the efforts to promote local assembly, deepen auto technology and generate jobs.”

He lamented the refusal of President Muhammadu Buhari to give assent to the Nigeria Automotive Industry Development Plan (NAIDP) Fiscal Incentive and Guarantees Bill, arguing that the Chinese are simply taking advantage of a loophole resulting from the lukewarm implementation of the auto policy.

“One of the many implications of lack of a legal framework for the policy and the imminent invasion of Chinese tokunbo vehicles, is that many renowned OEMs {Original Equipment Manufacturers}, who are afraid to invest in Nigeria because of our usual policy summersault, will remain reluctant because there is no assurance that their investments will be protected.

“It is also very ridiculous to hear the argument that tokunbo vehicles are not on the import prohibition list and therefore should be allowed to freely come in as long as they are not old. The emphasis should rather be on loss of jobs resulting from the present inactivity in the auto manufacturing sector.

“And there is no way the situation will improve if we continue to allow used vehicles to flood into the country while we take one step forward and two steps backward with the auto policy.”
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