Epunchng - Most read newspaper in Nigeria Wednesday November 15 2017 - Page 25

WEDNESDAY, NOVEMBER 15, 2017 business & economy New vehicle sales drop by 80% Rasheed Bisiriyu T he total number of new vehicle sold in Nigeria may not exceed 10,000 units at the end of the year, dropping from 50,000 units before the introduction of a new automotive policy in 2013. Local automakers and dealers stated this in Lagos on Tuesday and gave low purchasing power due to the economic crunch, scarcity of foreign exchange and high interest rate as some of the factors responsible for the 80 per cent drop. They spoke at the 2017 symposium of the Automobile and Allied Services Group of the Lagos Chamber of Commerce and Industry held under the theme, ‘The Nigeria auto policy: The current drivers’. The Executive Director, Truckmasters Nigeria Limited, Dr. Oseme Oigiagbe, said rather than encourage production and purchase of new vehicle sales, the enforcement of the auto policy had largely led to significant reduction in the sales figures. He said the figures had consistently dropped from 50,000 units in 2013 to 40,000 vehicles in 2015; 20,000 in 2016 and 10,000 this year. Oigiagbe, who stated that the Federal Government ought to have placed a total ban on the importation of used vehicles to drive new vehicles’ patronage, lamented the high interest rate on vehicle loans, ranging from 25 per cent to 27 per cent. The Executive Director, Kewalram Chanrai Group, Mr. Anil Sahgal, also put the total figure of new vehicles sold this year at 10,000 units, stressing that without the support of the government for the automobile assemblers, the industry would not make any headway. The Executive Director, Nigerian Automotive Manufacturers Association, Mr. Remi Olaofe, said many of the auto assemblers were merely producing vehicles and dumping them in warehouses as a result of low patronage. The Managing Director, VON Automobile Limited, Mr. Adetokunbo Aromolaran, who described the situation as pitiable, said there was no way the nation could make progress if the government continued to buy imported Dangote sells noodle plants to rival for N3.75bn Stanley Opara with agency report A unit of Dangote Flour Mills, Dangote Noodles Limited, has sold two production lines to rival pasta maker, De United Foods Industries, for N3.75bn ($12.26m), the company said on Tuesday. De United said it had signed an agreement with Dangote Noodles to buy plants at its Ikorodu and Calabar factories. It will also buy stock worth N383.94m, according to a report by Reuters. The deal comes after Dangote sold a small stake in its cement business to foreign investors in a one-off stock market deal valued at N27bn. Dangote Flour Mills, majority owned by Africa’s richest man, Aliko Dangote, had said it wanted to quit the noodles business to focus on flour and pasta production. Nigeria’s noodle market is fiercely competitive and De United, with a market share of around 70 per cent, is seeking to consolidate the sector. Privately-held Dangote Industries Limited, with interests in agriculture, real estate and truck assembly, bought back the flour unit it had sold to South Africa’s Tiger Brand for $1 in 2015 after it posted losses. Shares in Dangote Flour Mills have more than doubled so far this year after rising by 276 per cent last year. The stock price was down by 3.17 per cent on Tuesday at N9.20 naira. Dufil Prima Foods, the parent of De United Foods, is a privately held company set up over two decades ago, which has grown to become the largest pasta maker in West Africa. De United said the transaction had been approved by both companies and the regulators. A banking source close to the deal said that De United would continue to produce noodles under the Dangote brand for two years after the acquisition. In July Dufil Prima Foods said it would raise N40bn in the local debt market to broaden its funding base. fully built vehicles. “The government remains the biggest buyer, and it has to lead by example by buying made- in-Nigeria vehicles. The auto business is demand- driven; once volume grows, the cost of production will drop and vehicle prices will come down. There is also the need to create viable vehicle finance schemes,” he stated. The Managing Director, National Trucks Manufacturers Limited, Mr. Ibrahim, Bayero, said, “Majority of us have been recording losses in the last five years due to poor sales.” He criticised the granting of licences by the government to 53 auto firms to assemble vehicles in Nigeria, saying, “It does not make economic sense,” and warned that without sincerity, the auto policy would not achieve its desired goals.” 25