According to the Oxford Business Group, Nigeria imports nearly all of the cars on its roads. Before the announcement of the Nigerian Automotive Policy in 2013, an average of 50,000 new and 150,000 used vehicles were imported each year. However, since June 2015 when the policy was fully implemented, formal imports of new vehicles have dropped by more than 50 percent according to a December 2015 local newspaper report.
The Nigerian government introduced the policy under its National Automotive Industry Development Plan (NAIDP) in a move to resuscitate its local automotive assembly industry which has not traditionally been able to compete with imports. Fully Built Unit (FBU) cars falling under H.S. Code 87.03 would attract a duty of 35 percent and 35 percent levy totaling 70 percent. Also, FBU commercial vehicles falling under H.S. Codes 87.01, 87.02, 87.05, 87.07, 87.16 would attract a 35 percent duty without levy.
Local assembly plants would be allowed to import Completely Knocked Down (CKD) units at 0 percent duty, Semi Knocked Down (SKD) of H.S. Code 87.16 at 5 percent duty and FBU cars at 35 percent duty and FBU commercial vehicles at 20 percent duty without levy in numbers equal to twice their imported CKD/SKD kits.
- Titled Africa’s next automotive hub according to PWC report
- the Nigerian government in 2013 announced a new national automotive policy, the National Automotive Industry Development Plan (NAIDP), which seeks to discourage vehicle importation and encourage local production
- Offers a large market worth 1700000 USD
- Out of which 1million USD accounts local production and 70,000 USD accounts for imports
- Although a used vehicle dominated market but has the potential to be 1 million new car market
- The total imports of Nigeria from world stands at 1.4 bn USD out of which India’s share is 224 million USD
- Hence Nigeria offers a market of about 1.1 bn USD for India exporters to explore