The Group Executive Director of Lanre Shittu Motors (LSM), Mr. Taiwo Shittu, has called on the federal government and other finance institutions in the country to place on emphasis on financing of vehicles for commercial operations since they guarantee quicker returns on investment.
Mr. Taiwo Shittu, who is an experienced auto salesman, told journalists in Lagos recently that “If we believe in Nigeria, we must do away with used vehicles. It’s part of the sacrifice that we need to make. We can start by making it look unattractive to reduce the volume being imported”.
According to him, “We have to look for a good finance scheme to support the new vehicle purchase. It is not that Nigerians don’t like new vehicles; it is because finance is not there. And where there is a finance arrangement, the issue is the cost and how to pay back. If I’m buying a car on loan for my comfort, I may be skeptical about how to pay back without a reliable income.
“Government should therefore focus more on how to finance the commercial segment of the new vehicles purchase. Since the vehicles are going to be used for business, it will be easy to pay back the loans”.
He also reasoned that financing commercial vehicles purchase for commercial use will boost employment opportunities for many Nigerians, as he said “this will also generate more employment opportunities for the people. Giving a loan to anyone to buy a vehicle that will be used for business is like an asset that will bring back money”.
The Director, whose company now operates a successful auto assembly facility in Lagos, added that “there is no way you will buy a new truck on loan for a business venture and you will not make back the money in one and a half years. And this is a truck that will still be on the road for 15 years or more”.
On the value chain, he explained: “look at the farmers in the North producing tomatoes and others, most of these perishable food items get destroyed in the farm because they cannot afford the high cost of transporting these goods to the big markets in cities like Lagos and Abuja. The cost of moving the items from Kano to Lagos can be as high as N1 million. How many of these peasant farmers can afford that?
“But if the government can have a finance scheme for new commercial vehicles, they would be able to buy the vehicles and promptly move the goods to Lagos, Ibadan, Port Harcourt, Aba, Onitsha, Abuja and those places with high population. More people would be encouraged to return to the farm and do more”.