• Stock investors count losses as RT Briscoe, SCOA hit a 10-year low• Auto sector on verge of collapse over rising imports, operators warn power and low demand for locally-assembled vehicles, have inflicted a toll on the automobile sub-sector, as Nigeria has expended over N4.12 trillion on the importation of used vehicles in the past 10 years.
The development has become a source of worry to investors who are currently counting and lamenting their losses. They urge the Federal Government to support the industry with credit facilities, stressing that unless a single-digit interest rate was introduced, driving volume and attracting investors, especially spare parts manufacturers, would remain elusive.
Aside from the provision of incentives, Yusuf said patronage of made-in-Nigeria automobiles and accelerated backward integration programmes by operators in the sector are needed to reduce vulnerability to the exchange rate shocks. In 2014, the figures dropped to N36.7 billion and subsequently rose to N157.8 billion in 2015. The figure dropped to N105 billion in 2016 and one year after, it slumped further to N87 billion.
A look at the stock price showed that as at 2011, AG Leventis was N2.66 kobo. But at the close of trading on February 19, 2018, it dropped to 60 kobo per share before the delisting from the exchange in 2019. For Scoa Plc, the stock rose to N8.50 kobo but depreciated to N2.38 kobo as of March 30, 2022. On Thursday, June 16, it further depreciated to N1.94 kobo and recorded zero trade. Also, within the same period, RT Briscoe rose to N3.
An independent investor has asked the government to introduce tax relief for operators in the industry to stimulate recovery. The company continued to be subdued by rising costs during the half-year ended June 30, 2019, as its cost of sales grew by 39.84 per cent to close at N2.397 billion in 2019 from N1.714 billion recorded in 2018. Loss after tax stood at N424,331 million from N1.710 billion reported in 2018.
The company began the 2021 financial year in the red, sinking further to a loss of N498,476 million for the quarter ended March 31, 2021, as against N248,913 million reported in 2020. According to a report from the Nigerian Stock Exchange , the company also reported a pre-tax loss of N204,556 million during the period under review as against a pre-tax loss of N165,965 million recorded in 2016. The company’s revenue stood at N3.350 billion in 2017 as against N3.581 billion reported in 2016, accounting for a drop of 6.45 per cent.
Brand new cars are too expensive ild rather spend 13m on a used benz than spend the same on a new geely. The cost of production, high fx exchange rates and high cost of customs duty are responsible for the outrageous cost of the vehicles.