Senate probes leakage of new Automotive policy

on   /   in Business 1:44 pm   /   Comments

ABUJA – THE Senate Committee on Investment yesterday commenced a probe on the alleged leaking of the nation’s Automotive policy to Stallion Group of Companies, dealers on Nissan, Honda, Hyundai, Voxwagen and Audi brands.

At the public hearing of Senate Nenadi Usman-led Senate Committee on Investment with stakeholders over the controversies trailing the newly introduced Nigerian automotive policy, the Stallion Group of Companies which is a major auto dealer was accused by a lead competitor to be privy to insider information on the new automotive policy launched by the federal government on October 2, 2013 and used it over other dealers.

In a petition to the senate panel by competitors,Stallion allegedly had a pre-knowledge of the details of the automotive policy and used it to its advantage, as the deliberation on the automotive policy was going at the Federal Executive Council meeting on October 2, the Stallion Group, headed by Mr. Sunil Vaswani, rushed to open letters of credit to the tune of $382 million to cover three years of imports for 20,000 cars.

On the insider leak allegation, Senator Usman said, “The committee has received figures of vehicle imports over the years and we will go back as a committee and do our verification. Clearly, stakeholders have no problem with the auto policy, but have reservations on the manner of implementation, I think that is why we are here.”

But the Chairman of Elizade Motors, major dealers of Toyota and representatives of auto manufacturers’ in Nigeria Chief Micheal Adeojo said his group backed the auto policy, but insisted that the time-line provided in the auto policy for local dealers to establish motor assembly plants in the country be extended by two years.

He said, “There have been three failed attempts at motor manufacturing. The fourth must not fail. Implementation of the auto policy should wear a human face. We are not opposed to this policy, but we are not agreeable to the way it is to be implemented.”

The federal government had on October 3, 2013, made public the new automotive policy as the deadline for the establishment of Form Ms to import under the current tariff regime until February 28, 2014.

As at October 2, the duty on fully built units (FBUs) passenger cars was between 20 and 35 per cent, while a 10 percent flat rate was imposed on commercial vehicles. But in order to encourage local manufacture of cars, the automotive policy jacked up the duty on passenger vehicles to 70 per cent and 30 per cent for commercial vehicles. This means that all letters of credit (L/Cs) opened after October 3 would attract the new duty, while all L/Cs opened before October 3 would attract the old duty until February 28, 2014.

Speaking on behalf of the Stallion Group of Companies, the Managing Director, VON Automobile Nigeria Limited, Tokunbo Aromolaran debunked allegations of an inside leak as bandied by some competitors,and that all local stakeholders in the automotive industry were aware of the planned automotive policy, but failed to act.

He said that the jacked up vehicle imports was only a smart business move by the Stallion Group to cover for its 2014 stock in preparation for the newly introduced auto policy.

According to him, “In business, when information comes, you can either act on it or otherwise. How fast you move is a function of how fast you are.

“There will never be a right time to start an automotive policy… over the six months, Nigerians will be provided with low cost vehicles.”

However, the Minister of Trade and Investment, Olusegun Aganga faulted protest by some stakeholders, insisting that they were carried along in the formation of the automotive policy.

Aganga said initial challenges with the auto policy were “teething” and would be addressed as implementation progresses.

In separate submissions, the Manufacturers Association of Nigeria (MAN) and Nigerian Associations of Chambers of Commerce, Industry, Miines and Agriculture (NACCIMA) backed the federal government’s automotive policy.

    Print       Email