Market News

By Anozie Egole

There are indications that the country may experience a scarcity of foreign-used vehicles, popularly known as tokunbo cars, as dealers complain of import difficulties.

Car dealers, who spoke with The PUNCH in Lagos on Monday, blamed the high exchange rate, which had affected the duty rate, among others, for the latest development.

The State Secretary of the Lagos State Motor Dealers Association, Mr Olaniran Adelana, said it was difficult to sell the old cars because they were not sure of getting new ones.

“The rate of dollars is making it difficult for us to purchase cars the way we used to buy them from Europe. And we are having challenges selling old stocks because of the frequent depreciation of the naira,’’ he explained.

Adelana said some dealers had gone out of business because of the current challenge, adding that the recent gain by naira against the dollar was insignificant.

Another car dealer with Chimex Motors at Berger Car Mart, Mr Chinonso Amaraiwu, said that though sales of cars had gradually picked up, restocking was a major issue.

“Car sales are gradually picking up, but the major challenge now is how to replace the ones sold. Cars are no longer entering the country as it is used to, because of the many challenges facing vehicle importation, ranging from the duty payable on imported cars to other challenges.

“The duty is discouraging a lot of importers from going into vehicle importation. Very soon, people will find it very difficult to buy cars, especially tokunbo vehicles, because they are no longer coming the way they used to come before now,” he asserted.

Another car dealer at Amuwo-Odofin Area of Lagos State, who simply gave his name as Chibueze, said, “The high cost of importing tokunbo cars is associated with the exchange rate.  For instance, you can sell your car at its current price of say N6m and when you want to bring in the same car, of the same year and model, you will find out that you can’t get it for that amount.”