Nigeria has approached South Africa for help in advancing our moribund vehicle manufacturing sector and also help with technical assistance to create a market for the industry. In response the South African Minister for trade and investment responded by saying
“As a first step it is considering a limitation on used-car imports”.
As we all very well know Nigerians import millions of second hand used cars everyday as a means of personal transportation. New cars are expensive in Nigeria since they are also imported. Assembling them in Nigeria, will make them cheaper import fees will be eliminated and government incentives will be available for the formative years of the sector. However, even if the government grants incentives, imported used cars may still be cheaper a situation that may increase loss of investments for investors.
It will be interesting to see how this pans out considering the influence and cartels in the used cars industry. Nigerians will also revolt as newer cars are expensive to buy and to finance.