The Managing Director of Volkswagen of Nigeria Automobile Limited, Mr. Tokunbo Aromolaran has linked the prevailing drop in purchasing powers of Nigerians occasioned by the joint forces of recession and inflation to the drop in sales, saying the scenario has discouraged the group in raising production within the period.
In an interview, he said “Business has been very slow. People are not buying and when they are not buying, we cannot keep producing”.
On why the new auto policy failed to lift activities at VON, Aromolaran said “Foreign exchange is what is used to build the capacity and it is not available. The auto policy does not make cars available. One has to open letters of credit and import parts for the car assembling”.
“ It is because of the auto policy that we started assembling in Nigeria in the first instance and that is the only reason we are able to do the volume we did last year. But once the forex issue started, the challenge set in. Now a dollar is N470; six months ago, it was about N200. That means the price of my car should have gone up by more than twice.
He revealed further that his company was not so lucky like other to have access to to official exchange rate, saying “No, we don’t; if they tell you that we do, it is a lie. We all have our LCs at the bank and we have been queuing up like every other person”.
“If it takes one or two months to get $200,000, that does not give me three vehicles. These cars are big value items and not things that you get $10,000 and just go and buy.
On the number vehicles Von can sale in Nigeria to stand and say it has broken even, Aromolaran said “The annual vehicle sale in South Africa is about one million; ours is only about 27,000”. “Last year, our total sale of both new and used vehicles was 400,000. Used vehicles made up about 75 per cent of the sale while 25 per cent was made up of new vehicles. Now, because of the economic recession, our own has dropped by almost half to less than 30,000 new vehicles.
“Last year, Toyota Camry was around N10m; today, it is N21m. Last year, our buses sold for N13.5m, now, they are N27m. How many people are buying? These are the issues. We are buying forex at N470 to $1. Last year, forex was N197, N198, now it is officially N395 but in reality, it is N450 or N470.
