Car dealers have bemoaned the foreign exchange (Forex) shortage and its heavy toll on the Nigerian car industry.
They said the liquidity crisis has stifled imports and raised the cost of cars, adding that the development requires urgent government intervention.
Recall that in July 2021, the Central Bank of Nigeria (CBN) stopped selling Forex to Bureau De Change operators on the grounds that the parallel market has become a channel for illegal Forex flows and transplants . However, this decision has resulted in a free fall of the naira.
On July 29, the naira depreciated against the US dollar in the official market, falling 0.66 percent to N429.00 per dollar from N426.20 traded on the Nafex window in the previous session on July 28 The parallel market traded at N700-N710 per dollar amid a lack of FX supply as demand rose.
Managing Director/Chief Executive Officer, Carz4Elite, Fure Ukueku said that getting Forex is a big challenge and fluctuations in the exchange rate are seriously affecting business transactions, especially imports.
“And since we’ve seen that, the cost of cars has gone up 40 percent, and that’s affecting customers, and maintenance costs are going up.”
Ukueku said the process of clearing cars at the port is cumbersome and involves multiple taxation. The government can reduce import duties, provide tax rebates, and provide a favorable environment for car dealers.
He said it was also important that the government provide a digital operating system that would reduce human interface at the port. This helps importers settle bills in their comfort zone and go to the port and collect their shipments.
He said the government should connect the port to the rail system for ease of transportation and affordability of goods.
Speaking of an auto finance partnership with Fina Trust Microfinance Bank in Lagos, Ukueku said: “We are here today to announce a surprise package for our customers this Ember month with our partner, Fina Trust Microfinance Bank.
“We understand that some customers would like to buy cars at this time for Christmas, but due to the country’s economic situation, it is difficult for them to pay immediately for the cars of their choice. The customer wants to buy a car and can save 30 percent at the Deposit the bank, the bank finances the 70 percent and the customer begins to settle the remaining amount in installments.
He said: “This move, and more to come in the future, is our unique opportunity to help our customers own our car brand stress-free this season.”
According to him, the company Carz4Elite is a subsidiary of Elite Atlantic Auto, which imports fairly used cars such as Mercedes, Lexus, Toyota and Hyundai engines from the USA
“We have been in business since 2013 and source the cars directly from the USA. Our representative in the US ensures that our sourced cars are the best on the market at a competitive price,” revealed Ukueku.
Talking about the durability of these fairly used cars from the US, Ukueku said that they are durable due to the strict process of hand selecting these cars for Nigerian users.
“But since 2013, when we started the car business, we not only sell cars to our customers, we advise them on their choice, budget and lifestyle and provide after-sales service. Most importantly, we are building a closer business relationship with customers and that is what sets us apart in our auto service offering in the country,” he said.
For his part, Fina Trust Microfinance Bank’s product head, Buddhika Rathnayaka, said that in order to qualify for the loan, customers would have to open an account with the bank, explaining that the bank only needs a six-month bank statement to eligibility for the loan from the customer . Customers can negotiate with us at any time before concluding the contract.
Rathnayaka said the interest rate on the loan is a maximum of four to five percent.
“The more able you are to repay the loan, the lower the interest rate, which can vary between two and three percent. As a regular customer, you will receive a discount on your second car or SME loan.
“What we are looking at is solvency; We look at how we can easily pay the loan. We’re a customer-centric bank, we’re not a rule-making bank, and we’re flexible in terms of requirements, the kind of cars you need because we expect repeat business with our customers,” he said.