Senate probes leakage of new Automotive policy

Senate probes leakage of new Automotive
policy
on december 12, 2013 at 1:44 pm in business
BY JOHNBOSCO AGBAKWURU & JOSEPH ERUNKE
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.