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Recession: Ford stops exportation of 500 vehicles to Nigeria

31 October 2016, 14:23

Abuja - There are indications that Ford Motor Company has suspended its planned exportation of 500 units of vehicles meant for the Nigerian market owing to the current economic recession, Punch reports.

The United States automaker was said to have assembled the vehicles in its South African factory and completed all arrangements to ship them to Nigeria before halting the decision.

Prof. Okey Iheduru of the Arizona State University, United States, hinted at a forum in Lagos that Ford had dismantled over 500 units of vehicles meant for the Nigerian market because the Coscharis Group, its local representative, could not accommodate them.

The General Manager, Marketing and Corporate Services, Coscharis Group, Abiona Babarinde, attributed the development to “forex-related issues.”

He said the vehicles were “to be imported as SKD (semi-knocked down) kits for (auto) assembly but got stuck in South Africa because of slow sale of what we already have in stock in Nigeria.”

Ford recently discontinued its business relationship with one of its two partners in Nigeria, RT Briscoe, leaving only Coscharis Motors as its sole representative in the country.

A statement from the Ford Motor Company of Sub-Saharan Africa said tough economic climate arising from the fall in oil prices, foreign exchange shortages and rapid devaluation of the naira was adversely affecting its operation in the region, including Nigeria.

The statement, which was sent by its spokesperson, Chipo Punungwe, read in part, “We continue to work through a tough economic environment in the sub-Saharan African region, including various economic factors such as lower oil prices, foreign exchange shortages and the rapid devaluation of local currencies, which have led to higher than normal inventory levels.”

Assemblers and dealers in new vehicles have complained about a drastic drop in vehicle sale this year due to recession.

A number of the companies, it was learnt, had to lay off some of their workers as their annual capacity utilisation had dropped by 97 per cent, from 500 000 to 15 000 vehicles.

Meanwhile the Federal Government has stated its intention to bail out the Nigerian economy out of a current recession with a N4.72 trillion fiscal stimulus plan after the country slipped into one of its worst ever economic crisis according to News24.

The stimulus plan will majorly be funded through sales of national assets, which is part of a four-pronged plan to generate and inject massive foreign capital into the economy.

The Minister of Budget and National Planning, Udoma Udoma said that the stimulus plan would be funded majorly through the sale of national assets, advance payment by joint venture operators for license renewals, infrastructure concessions and the use of recovered funds.

- News 24

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