Market News

Car dealers have bemoaned the scarcity of foreign exchange (forex) and its heavy toll on Nigeria’s automobile industry.

They said the liquidity crisis has stifled importation and hiked the cost of cars, adding that the development requires urgent intervention of government.

Recall that the Central Bank of Nigeria (CBN) ended the sales of Forex to Bureau De Change operators in July 2021 on grounds that the parallel market had become a conduit for illicit Forex flows and graft. However, this decision has led to a freefall of the Naira.

As of July 29, Naira depreciated against the U.S. dollar at the official market, declining 0.66 per cent to N429.00 per dollar from N426.20 it traded at the Nafex window in the previous session on July 28. Recently, the currency at the parallel market traded at N700-N710 per dollar amid a shortfall in foreign exchange supply as demand increased.

Managing Director/Chief Executive Officer, Carz4Elite, Fure Ukueku, said getting forex is a big challenge, and the fluctuation of foreign exchange rate is seriously affecting business transactions, especially importation.

“And since we started experiencing this, the cost of cars has increased to 40 per cent and that affects patronage and the cost of maintenance rises.”

Ukueku said the process of clearing cars at the port is cumbersome, with multiple taxation. Government can reduce import duty, give tax rebates and provide an enabling environment for car dealers.

He said it is also important that the government provides a digital operating system that would lessen human interface at the port. This will help importers settle bills at their comfort zone and go to port and pick their consignments.

He said the government should link the port to the railway transport system for easy conveyance and affordability of goods.

Speaking at an auto finance partnership with Fina Trust Microfinance Bank in Lagos, Ukueku said: “We are here today to announce a surprise package for our clients in this Ember month with our partner, Fina Trust Microfinance Bank.

“We understand that some clients would like to buy cars in this period for Christmas but because of the economic situation of the country, it is difficult for them to pay at once for their choice of cars, so Carz4Elite and its partner decided that if a client wants to buy a car and he or she is able to deposit 30 per cent with the bank, the bank will finance the 70 per cent and the client will start off-setting the balance in installment.

He said: “This step taken and more that will be coming in the future is our unique way to help our clients own our brand of cars this season without stress.”

According to him, the company, Carz4Elite, is a subsidiary of Elite Atlantic Auto that imports fairly used cars like Mercedes, Lexus, Toyota brands and Hyundai motors from the U.S.

“We have been in the business since 2013, and we source the cars directly from the U.S. Our representative in the U.S ensures that our sourced cars are the best in the market at a competitive rate,” Ukueku revealed.
Speaking on the durability of these fairly used cars from the U.S., Ukueku said that because of the rigorous process of hand picking those cars, it is durable for Nigerian users.

“However, since 2013 when we started the car business, we don’t just sell cars to our clients, we guide them on their choice, budget and lifestyle, and we do service after sales. Most importantly, we establish a closer business relationship with clients and that stands us out in our car service offering in the country,” he said.

On his part, Head of Product, Fina Trust Microfinance Bank, Buddhika Rathnayaka, said to qualify for the loan, customers must open an account with the bank, stating that for eligibility of the loan, the bank only needs a six months bank statement of the customer. Before signing any agreement, customers can always negotiate with us.

Rathnayaka said the interest rate for the loan is four to five per cent maximum.

“The more capable you are to repay the loan, the lesser the interest rate, which may vary between two to three per cent. If you are coming as a repeat customer, you get a discount on your second car or SME loan.

“What we are looking at is the payment capacity; we are looking at how to pay the loan without any hassle. We are a customer centric bank, we are not a bank that gives rules and we are flexible in terms of requirements, the kind of cars you need because we are expecting recurring business with our customers,” he said.