5 benefits of China’s export of ‘Tokunbo’ cars to Nigeria

Nigeria and China diplomatic relations date back to 1971, but both countries formally established strategic partnerships to promote relations in 2005 during the administration of former Nigeria’s President Chief Olusegun Obasanjo.

The ruling All Progressive Congress government of President Muhammadu Buhari has continued to consolidate on the agreement between the two countries on assumption of office on May 29,  2015.

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As at 2017, the Deputy Chinese Ambassador to Nigeria, Mr Lin Jing, was quoted by The Punch that China’s bilateral trade with Nigeria stood at N4,428,000,000,000 ($12.3bn).

That volume is expected to skyrocket in the incoming years as China, which is considered as the world’s biggest automotive market according to autojosh, has chosen Nigeria as one of the many destinations for export of used cars popularly called “Tokunbo”.

The decision of China to choose Nigeria is symbolic of their bilateral agreement on trade.  China is considered one of Nigeria’s closest allies and partners.

Brands that will be exported from the Asian country to Nigeria, according to reports, include Volkswagen, Land Rover, Zhongtong, King Long, Toyota, Hyundai, Trumpchi, Yutong, and WOHO.

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While hundreds of Nigerians continue to critique the policy, most of them dwell more on the adverse effect it would have on Nigeria’s economy.

However, we’ve compiled five benefits average Nigerians can get from the importation of fairly used cars (Tokunbo cars) from China to Nigeria.

Affordability:

The minimum wage for Nigerian civil servants is N30, 000 while a brand new 2008 Toyota Camry Base 4dr Sedan price starts from N6,780,000, according to naijauto. The question is: How many faithful civil servants can afford to afford a brand new cars?

Let’s consider a family of four who is always battling with settling house rent every year, children’s school fees every term and other financial responsibilities.

The new trade will enable average Nigerians who can’t afford a new car pay off a used car much faster. Usually, fairly used cars prices are almost 50% lower than new cars.

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Bulk of depreciation occurs more on new cars:

“The value of a new vehicle can drop 11% on the drive home,” says rawhide.org. This means, for instance, your N7,200,000 vehicle is worth only N6,408,000 once it leaves the lot. The auto expert also believes that the new car continues to depreciate as weeks, months, and years pass.

With used vehicles, the bulk of the depreciation has already occurred. This is going to be an advantage for an average Nigerians who can’t afford brand new cars.

No exorbitant fees:

Shipping charges, destination fee, dealer preparation and customs fees on a brand new car in Nigeria could be crazy and may not be suitable for an average Nigeria.

The fees on brand new cars could be enough to purchase a used car.  A used car generally has no hidden fees, with shipping and clearance fees you’re good to go for a Tokunbo car.

Ineffective auto financing in Nigeria:

In the 1970s, there was auto financing for civil servants. Also known as car financing, it is an arrangement by a viable organisation or government which allows its workers to acquire a new car without a full-cash single lump payment.

It is an arrangement that makes payment more convenient for workers without incurring hidden charges. Some advanced countries like the United State, Canada, Australia do this, but auto financing in Nigeria could be as exorbitant than paying a single full-cash.

China’s export of used cars to Nigeria will enable average Nigerians to get the car of their choice according to their financial capacity.

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Variety:

With the plan of China to export its used cars to Nigeria, it means Nigerians who were unable to afford brand new cars are more likely to find their choice of Tokunbo car.

Finally, the export of used cars from China to Nigeria would enable average Nigerians to maximize savings while they attend to other unavoidable financial responsibilities.

Are you in support of the new auto bilateral trade between China and Nigeria? Share your thoughts with us.