Chairman of the Parliamentary Industry Committee, Enitan Dolapo-Badru, blamed the high interest rates charged by deposit banks for the disruption of the National Automotive Industry Development Plan 2013.

One of the main focuses of the Nigerian Automotive Industry Plan was to expand the automotive sector by leveraging local resources and increasing the sector’s contribution to national prosperity.

Speaking during a tour of Coscharis Automobile Company in Lagos, Dolapo-Badru noted that the previous National Assembly had pushed for the implementation of the policy, but the high interest rates of banks prevented the implementation of this policy.

According to him, the National Assembly also approved N10 billion for the National Automotive Design and Development Council but regretted that banks’ demand for interest rates of about 28 percent from prospective vehicle buyers derailed the policy.

He explained that the policy, which eventually became the Law, was intended to be implemented in collaboration with banks before financial institutions backed out due to high interest rates.

He suggested creating a legal framework to ensure the success of future automotive campaigns in the country and emphasized that car assembly plants should lead the project rather than involving banks in such plans.

He said: “This plan was supposed to work with the banks, but they cut it off because the banks came to consumers and told them to pay around 28 percent interest on loans. So it didn’t work, but we’re now developing a plan where commercial banks are completely excluded.”

“You can’t ask someone who has trouble eating to come and buy a car. For example, you cannot come to me and tell me to pay 35 percent interest on N20 million. This interest rate alone could cover school fees and feed the family for a year. You can’t add expenses to an individual’s already limited budget.

“The way forward is for assembly plants and the National Assembly to devise a plan to encourage the purchase of new products. The buyer can be given a warranty for the next ten years. “The program needs to be able to accommodate customers.”

Also, Dolapo-Badru praised Coscharis for taking the bold step of establishing quality assembly plants across the country and creating job opportunities for qualified Nigerians.

Josiah Samuel, Group Managing Director of Coscharis Group, reiterated that the automobile industry is ready to address existing gaps in the sector.
Samuel explained that once the automotive policy was implemented, the company focused on it in the hope of expanding the industry in Nigeria.

“If there is any policy or program that will help increase and improve production, I think we are here to adopt it. So, 10 years ago, we praised the auto policy and quickly approached our partners, set up a Semi-Tipping plant at one of our factories in Ikeja to enable us to get up and running quickly and at the same time as our partner Ford Motor Company to build a new factory at our Awoyaya plant We work together with.

“There were a lot of things in auto policy that would help drive demand because it’s a numbers game. The policy on how to curtail and gradually reduce second-hand car imports is a single-digit financing plan to encourage those who want to buy new cars. “This was also appropriate,” he said.