Automotive retailers have differing views on reduced tariffs for imported cars

Car dealers have expressed a range of reactions to the Federal Government's revised tariff regime, which features a decrease in import duties on vehicles, citing both potential benefits and drawbacks. The revised regime is expected to reduce vehicle prices and lower business costs, ultimately benefiting buyers.

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The dealers shared their thoughts with the News Agency of Nigeria on Sunday in Abuja, noting that the policy's overall impact would be influenced by various economic factors, including exchange rates.

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NAN recalls that the Comptroller-General of the Nigeria Customs Service, Bashir Adeniyi, announced the revised import duties while defending the service's 2026 budget proposal before the House of Representatives Committee on Customs and Excise.

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Adeniyi revealed a reduction in import duty on used vehicles from 15 per cent to 5 per cent, and on brand-new vehicles from 20 per cent to 10 per cent, aiming to cushion the Green Tax Surcharge impact and promote cleaner vehicles.

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According to Adeniyi, the revised tariff regime is part of the Federal Government's broader 2026 fiscal policy, designed to support economic activities.

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Mr Ayoade Olamilekan, Chief Executive Officer of Lekjam Auto Nig Ltd, described the policy as a positive move that would increase the purchasing power of average Nigerians in acquiring vehicles.

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Olamilekan noted, however, that although implementation of the directive commenced in May, lower vehicle prices would be reflected in the next two to three months, as existing orders were made at previous rates.

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“We are all happy; we want everybody to have cars,” he said, voicing his support for the policy.

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Mr Olusegun Oketoyin of OloruntoFunmi Motors also commended the Federal Government's decision, but pointed out that dealers would need to sell their old stock purchased before the tariff revision before buyers could benefit from the reduced duties.

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Aminu Abdullahi, a car dealer based in Kano, said the reduction in import duty could increase demand for brand-new vehicles, giving buyers greater confidence and reducing concerns about encounters with customs operatives during highway checks.

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Another dealer, Idris Umar, described the reduction as a positive development, but noted that the continued depreciation of the Naira against foreign currencies could limit the benefits.

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He explained that although the lower import duty would provide some relief, the exchange rate challenge remained a major concern, as most vehicles were imported from Europe.

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In a post on his verified social media handle, Manga Muhammed, Chief Executive Officer of Manga Automobiles, said lower import duties would reduce vehicle prices, but cars with larger engines would cost more under the policy.

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Muhammed said dealers had cleared vehicles at the previous duty rates and would seek to recover their costs to avoid losses, but assured buyers that vehicle prices would eventually decline.

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Meanwhile, Eugene Nweke, Head of Research at the Sea Empowerment and Research Centre, said fiscal policies that significantly alter import costs without adequate notice could undermine commercial certainty.

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He warned that such fiscal policies could also distort contractual obligations and weaken investor confidence.

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Also, Mr Okey Ibeke, Principal Consultant at International Trade Advisory Services Ltd, said the reduction in import duties would not automatically translate into cheaper vehicles for Nigerians.

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Ibeke explained that the impact would depend largely on the Naira exchange rate, as well as port charges, customs valuation, shipping costs and other taxes, which still account for a significant share of the landed cost.