An industry shakeup is underway, as the federal government has unveiled new strategies to clamp down on unregulated importation of used cars.

The regulators in this industry will, with one move, clamp down on the activities of illegal importers, and also encourage local production.

Speaking in a meeting in Lagos, the Director General of the National Automotive Design and Development Council (NADDC), Mr. Joseph Osanipin announced that the regulator would be enforcing stricter dealership regulations.

FG to stop unauthorized importation of used cars

Osanipin stated that Executive Order 005 mandates ministries and agencies to encourage and even prioritise patronage of locally produced products over imports, Leadership news reports.

He noted that by stricter rules on dealers, the regulator would protect Nigeria from becoming a dumping ground for substandard and high-emission products that compromise the growth of local industry.

This, he said, would ensure environmental sustainability, and grow local industry to position Nigeria as a notable player in the automobile production industry.

Motor dealers react to new move

The Association of Motor Dealers of Nigeria (AMDON) President, Prince Ajibola Adedoyin, who was also present at the meeting commended the government’s move.

Adedoyin, however, noted that affordability is a key challenge in the industry as Nigerians are struggling with low purchasing power, and imported used cars are often the most affordable.

He called on the government to collaborate with and support the Nigerian Automotive Manufacturers Association (NAMA) to make locally assembled cars equally affordable for the average Nigerian.

Adedoyin promised that the Motor Dealers would work closely with the regulators to enforce compliance, and requested the entrenchment of clearer processes in the dealership registration system.

Recall that importers of used cars continually have to adjust the prices of their products to reflect the change in FX rates and increasing charges and duties from the Nigeria Customs Service.

In February 2024, the FX rates for clearing imported cars changed six times due to the naira devaluation.

This has further led to a crash in the sales of imported used cars, also referred to as Tokunbo cars.

A car dealer who spoke to Legit.ng, Mr. Ifeanyi Knorac, disclosed that car sales had declined because of the drop in purchasing power, and affording the locally assembled cars could be even more burdensome.

"The government's move is to stop Nigeria from becoming a dumping site for all kinds of accident vehicles, but the real issue is how many Nigerians can afford it. These locally assembled vehicles start from N15 million or thereabouts, and with the current economic realities, not many Nigerians can afford that. A normal civil servant cannot even afford it.

"For this to work, the prices of the locally assembled vehicles just have to crash. If that doesn't happen, then people will keep going behind the scenes to import and sell these cars"