Tokunbo vehicle dealers across the country have lamented significant decline in sales as imported used cars known as Tokunbo struggle to attract buyers.
This is even as dealers in Lagos in particular, said they are grappling with low patronage, following a recent increase in the Customs exchange rate.
Shipping Position Daily gathered that the rise in costs due to currency fluctuation has created substantial challenges for both dealers and potential buyers. In addition to the exchange rate issues, rising expenses related to spare parts and maintenance services have further aggravated the difficulties faced by Tokunbo vehicle dealers.
Checks by our correspondent revealed that the unexpected adjustment of the Customs exchange rate last month resulted in a substantial increase in the landing cost of vehicles, making Tokunbo cars less affordable for many buyers.
In a chat with our correspondent, Prince Ajibola Adedoyin, the National President of the Association of Motor Dealers of Nigeria (AMDON), expressed concerns about the new exchange rate’s impact on the automobile business. He highlighted the decreased purchasing power and emphasized that vehicle costs directly affect transportation expenses for Nigerians.
Adedoyin stated that, “purchasing power has dropped, because you know that as long as the rate of exchange has gone up and we have to use the dollars to do our purchases. Definitely, you should expect a rise in it.
“However, there are things we are expecting, maybe the Government would have done, which would have been able to help out in this area, because we all understand the fact that as long as there are some commodities that are not readily available within the country that will still need to bring in and vehicle is one of them.
“No matter how you say you want to bring in the local content to make us assemblers or manufacturers, we still know that we have a very long way to go and anything that affects vehicles affects transportation. So, we are still saying the same thing and we are still in the same period we would have been able to do something about it,” he added.
On his part, Chief Metche Nnadiekwe, the President General of the United Berger Motor Dealers Association (UBMDA), in a chat with our correspondent echoed same sentiments, describing the rise in the Central Bank of Nigeria (CBN) and Customs exchange rate as discouraging and harmful to the automobile industry. He emphasized that the sudden increase in the exchange rate without stakeholder consultation has had a detrimental impact on car sales.
“All of a sudden, you wake up and increase the exchange rate. It is not good and it is very wrong. This thing is killing the automobile business. People are no longer buying cars from us. My brother, you need to come here and see things for yourself. People are no longer buying. You will be buying a vehicle to sell, but the vehicle will stay with you for two years. Our members are unable to buy, and these are the people who have families. With this kind of thing and the hardships it creates, people will inevitably look for other ways to survive, which may drive some individuals into crime. If you come to our market, it looks like a mourning place where people are in mourning. In fact, we are mourning,” he lamented.
Also speaking Alade Olalekan, a car dealer at the Ikotun car market also expressed his concerns about the current state of the market. He said “the recent increase in the customs exchange rate has seriously affected our business. The landing cost of vehicles has skyrocketed, and as a result, we are finding it difficult to attract customers”.
“The fluctuating exchange rates has also made it challenging for dealers to maintain a stable pricing strategy.”We are constantly forced to adjust our prices to align with the ever-changing exchange rates. This creates uncertainty for both us and the customers,” he added.
