bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Wednesday 20.09.2017 | Name days: Marianna, Ginters, Guntra

Opinion: what is the fate of used cars in Latvia?

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RULatvia and the entire Baltic region has been a very popular market for used cars dealers from Western Europe since the restoration of independence. The used cars market was rather lucrative in the ‘90s. Even though the inflow of used cars has reduced over the years, imports of used cars in Latvia remain higher than imports of new cars.

«We began actively dealing in used cars set for import to Africa in 2004, when many dealers coursed on the Switzerland-Antwerp –Switzerland route, collecting used cars for exports in Switzerland and new models in Antwerp,» – says head of Kurbads logistical department Kristine Rimene.

In 2009, re-exports of new cars became popular. In 2012, when purchasing power recovered on the local market, this trend dried out. However, the volume of exported cars remained. According to information from Kurbads, exports of used cars from the largest European ports lead to Africa. The lion’s share of those cars is carried to Nigeria.

The used cars export scheme

«Once a week, the big Ro-Ro ferry with 1,000 used cars gathered from all over Europe departs from Antwerp, Rotterdam or Hamburg to the western coast of Africa. The cars carried by this ferry are provided by many different suppliers,» – says one anonymous business individual.

«It is important to make sure the ferry is 100% full. Otherwise the shipping company suffers losses. Because of that, companies often buy additional used cars to fill up storage. Later these cars are realized in Africa at the same prices, which create dumping on the market. It is a big obstacle in this kind of business.»

The Nigerian government has instituted a National Automobile Industry Development Plan, which provides for stimulating local car manufacture industry. The current situation with large imports of cars is considered problematic. This is why the Nigerian government has decided to increase import tax for used cars by 70%.

«It is because of customs that car exports end up in Nigeria’s neighbouring states – Togo, Ghana and Benin. From there, locals deliver these cars to Nigeria.»

«Other popular destinations for used European cars include Libya and Senegal,» – adds Kristine Rimene.

The fate of Latvian cars

«Africans know used cars well. This is why they would rather not buy cars from Latvia or other post-Soviet countries, because technical state of cars from this region is significantly worse than that of cars from Western Europe. This is why it is a lot harder for us to sell cars, so we are forced to draw in potential buyers using lower prices.»

Exports of cars from post-Soviet countries has its specific nuances: «Usually vehicles from Latvian and Estonia are in a poor technical state and/or are filled with all kinds of items. This causes additional problems for us in ports due to additional weight,» – Rimene describes the situation.

«We receive orders from European network members to bring specific cars to one of some of the largest ports in Western Europe. Then these cars are shipped to different destinations.»

Nigeria’s growing car market

Nigeria had a fairly well-developed car manufacture industry in 1970-1985. This was largely due to the country’s declared independence and oil price surge at the time. Unfortunately, the industry gradually declined into nothing.

Used cars that are shipped to Nigeria’s largest ports currently dominate the market. According to information compiled by the Nigerian National Automotive Council, approximately 150,000 used cars are imported, mainly from Europe, every year. With customs and spare parts, this market reaches USD 3.5 billion in value. Only 50,000 new cars are shipped to Nigeria annually.

«If we do not adopt a new policy, pressure on state economy will become unbearable, because even now we are too reliant on imports – it is not the way we want to use foreign currency,» – said Nigerian Industry, Trade and Investment Minister Olusegun Aganga.

Larger economy in Western Africa

Nigeria is the largest economy in Africa with its GDP worth USD 594 billion. In 2012, it took the lead from the previous economic leader – South African Republic.

More than 170 million people live in West Africa, including 15,700 millionaires.

Oil and gas exports (98% of all exports) form the foundation of the economy. What is interesting is the fact that residents of the largest exporter of oil in Africa are forced to wait in long queues at petrol stations…because of fuel deficit.

Notable economic growth is currently registered only in the south east of the country, especially in Lagos, which is the region’s business centre. The north is more under control of by Boko Haram terrorist organization than it is under control by the federal government.

Logistical comparison

According to results of the World Bank’s Logistics Performance Index study, Nigeria was on the 75th place in the world and Latvia was on the 36th place in 2014. This index is meant to help countries identify challenges and options in logistics in order to improve their results.

Nigeria’s largest problems, as mentioned in the study, lie in customs and infrastructure. The same applies to Latvia. However, low logistical performance is only one of multiple reasons why the oil country’s economy does not develop quicker.

Development restrictions

Boko Haram terrorist organization, which stands against Western values, in based in the north of Nigeria. They frequently partake in armed attacks and kidnappings in the region keeping the local populace in a constant state of fear. The Nigerian government seems unable to find resources to combat these terrorists.

Corruption remains one of the most wide-spread problems in Africa. Nigeria is no exception. Corruption is found even on highest level of the government. It is also one of the reasons why the oil superpower has to import fuel in order to satisfy demand. State orders are entrusted to people close to officials in power. Police, who are terribly underpaid, are unwilling to resolve these matters. Instead, they are more interested in making more money.

These are the obstacles that prevent the country from developing at a faster pace.

Ref: 103.109.109.3738


Leave a reply

Judins says parliamentary committee «is going nowhere»

The work performed by Saeima’s investigative committee in charge of oligarch case does not fit the established goal to investigate and analyse possible state capture, says member of the committee and Unity’s Saeima faction Andrejs Judins.

Study: residents criticize development of Latvia general situation the most

With the coming of autumn, residents’ optimism has declined significantly, according to results of Baltic International Bank’s Latvian Barometer.

Number of occupied jobs in Latvia up 9.3 thousand

At the end of the first half of 2017, in Latvia there were 903.2 thousand occupied posts, and, compared to the end of the first half of 2016, the number has grown by 9.3 thousand or 1.0 %.

Latkovskis says sometimes questionable votes are lobbied in Saeima in secret

There have been cases sin which questionable votes were being lobbied in the parliament in secret. Compared with last year, this tendency is demonstrating growth, said Saeima deputy Ilmārs Latkovskis in an interview to Latvijas Avīze.

E-governance advocate Ilves comments on alleged Estonian ID card vulnerability

The ex-President of Estonia Toomas Hendrik Ilves, who has been an active advocate of e-governance has emphasised that a possible security risk with Estonian ID cards has not put that the country's reputation as an e-state at risk.

Delna invites Saeima to support initiative to liquidate option to abstain from votes

Society for openness Delna invites Saeima deputies to support public initiative and liquidate the option for deputies to abstain from votes.

82% of Estonian households use mobile internet at home

As to the choice of internet connection in Estonia, 82% of Estonian households use mobile internet at home, Estonian statisticians have estimated.

Baltic Express attracts railway cargoes; decline noted for other carriers

Railway cargo carrier Baltic Express more than doubled its cargo volumes in the first seven months of 2017. Meanwhile, other two cargo carriers – LDz Cargo and Baltic Transit Service – have suffered cargo declines. Baltic Association – Transport and Logistics notes that it is ringing the alarm over the situation in the industry, not over the interests of its members.

Survey: more than half of Latvian residents are half-serious about their health

44% of Latvian residents use all medicine prescribed by their doctor when they get sick, according to data from Mana Aptieka&Apotheka health index.

In pictures: Zapad drill in full swing

BNN offers you an insight into the quadrennial join military training of Belarus and Russia, which have been inspected in person by Russian President Vladimir Putin and Russian Defence Minister Sergey Shoygu.

Rinkēvičs invites India to open an embassy in Latvia

During the 72nd session of the UN General Assembly in New York on Monday, 18 September, Latvian Foreign Affairs Minister Edgars Rinkēvičs met with his Indian counterpart Sushma Swaraj. The two discussed political and economic cooperation between the two countries.

Norwegian top policeman sentenced to 21 years in prison for aiding hashish contraband

A court in Norway, a country often recognised as one of the least corrupt globally, has convicted a senior Norwegian police officer to 21 years in prison after finding him guilty of taking bribes and helping drugs contraband.

Road Transport Administration: transport planning in Riga does not reflect region’s scale

Road Transport Administration plans to speak with Riga and Pierīga administrations about the fractured public transport system in the region, says the administration’s chairman Kristiāns Godiņš.

Mass Ryanair cancellations expected

Irish airline Ryanair has warned that due to an internal planning problem up to 400 000 flights could be cancelled in the European Union.

Legislative draft proposed to simplify referendum procedure

The Central Election Commission has registered Open Management Partnership in Latvia signature collection association’s legislative draft submitted for the fourth time. This legislative draft proposes cancelling amendments of 8 November 2012 to the Law on National Referendum, Legislative Initiative and European Citizens’ Initiative, as reported by the commission.

Greece to lift wine tax due to low revenue

The government of Greece plans to submit draft amendments to lift the country’s year-old excise tax on wine, Greek Minister for Agricultural Development and Food has stated.

Reirs: pension budget will increase by EUR 160 million next year

Next year, pension budget will increase by more than EUR 160 million, says Latvian Welfare Minister Jānis Reirs. He explains that the total pension budget will be EUR 1.93 billion, which means funding for next year’s pensions will be 9.19% higher.

Oligarch case’s parliamentary committee settles disputes with shouting

During a meeting of Saeima’s committee entrusted with investigating Oligarch case, a loud argument broke out between Unity faction member Andrejs Judins and publicist Imants Liepiņš.

IDB: it is too soon to expect corruption to go down in traffic monitoring field

Society’s condemnation of bribery is positive, but it is currently too soon to expect the problem of bribery in road traffic monitoring field to go down, admits Internal Security Bureau chief Valters Mūrnieks.

Apinis: Latvia’s Healthcare Ministry is intellectually weak

Pēteris Apinis, head of Latvian Association of Doctors, criticizing the reform plan, saying: «Just like the Napoleon cake has no Napoleon, the reform plan has no reforms.» He believes Healthcare Ministry’s intellectual potential declined in the past three to four years and that the institution in its current state is intellectually weak.

airBaltic performed 14,324 flights in summer

In August 2017, Latvian airline airBaltic carried 386,597 passengers or 21% more than it did in the same period in 2016, as BNN was informed by the airline.

Sudraba: deputy quotas matter will be resolved in officials’ offices this year

The matter of the so-called deputy quotas will be resolved in officials’ offices this time, deputy Inguna Sudraba of To Latvia from the Heart told Latvijas Radio.

Estonia should invest in long-term productivity, environmental protection – evaluates OECD

As Estonia’s economic recovery gathers pace, it is time to work for sustainable development by protecting the environment and looking for ways to increase productivity, the Organisation for Economic Co-operation and Development has recommended.

Option to abstain from vote proposed to be liquidated to reduce possibility of hiding opinions

On Monday 18 September, a citizens’ initiative will be submitted to the Saeima to liquidate the option to abstain from votes in the parliament.

KNAB commences criminal process in state institution’s service

Corruption Prevention and Combating Bureau has commenced a criminal process for, possibly, illegal activities in a state institution service.