Auto Industry Bill 2026: What It Means for Car Buyers

Nigeria’s lawmakers have put tokunbo cars back in the spotlight. On 7 October 2026, the Senate Committee on Industry toured PAN Nigeria Limited’s assembly plant in Kaduna alongside officials of the National Automotive Design and Development Council (NADDC), and the committee chairman, Senator Francis Adenigba Fadahunsi, made a blunt promise: the National Assembly will fast-track the proposed National Automotive Industry Bill 2026.

“Nigeria has become a dumping ground. So we have to reject it,” the senator said, according to a Leadership newspaper report of the visit. If you are planning to buy a tokunbo car, a brand-new car, or a locally assembled vehicle in the next year or two, this is worth paying attention to. This explainer covers what was said, what we know and don’t know about the bill, and what it could mean for car prices in Nigeria.

What Happened in Kaduna

The Senate committee and NADDC officials inspected PAN Nigeria’s facility, one of the country’s oldest vehicle assembly plants. Here are the key points from the visit, as reported by Leadership and other Nigerian outlets:

• The pledge: The Senate Committee on Industry promised to speed up passage of the National Automotive Industry Bill 2026. Lawmakers say the bill will protect investment in local vehicle assembly, push local content and help save foreign exchange.
• The “dumping ground” message: Senator Fadahunsi, a retired customs officer, said his customs career showed him how much money Nigeria loses by importing used foreign vehicles, especially in foreign exchange.
• A call to the President: He asked President Bola Tinubu to give the auto industry more support and argued for stronger incentives to get Nigerians buying locally made vehicles.
• Tricycles too: The committee said locally produced vehicles and tricycles could replace many of the imported ones now used in rural areas.
• NADDC’s view: NADDC Director-General Oluwemimo Joseph Osanipin said the visit showed that Nigeria has the capacity to meet a large share of its own vehicle demand through local assembly.

PAN Nigeria by the Numbers

The plant at the centre of the visit says a lot about the state of local assembly. According to figures shared by PAN’s Managing Director, Mrs Taiwo Oluleye, and the committee:

• Founded: 1972, started operations in 1975
• Site size: almost 300,000 square metres
• Installed capacity: 90,000 vehicles a year (reported elsewhere as up to about 240 vehicles a day)
• Jobs at full capacity: more than 3,000
• Training: about 12,000 artisans trained nationwide, including roadside mechanics and forklift operators
• Local content: once as high as 40%, now below 4%

That last number matters most. Mrs Oluleye said production had fallen because of high operating costs, exchange rate pressure, expensive borrowing and inconsistent policy. She told lawmakers that local assemblers “could not compete effectively” with businesses that simply import completely built vehicles. That is the gap the bill is meant to close.

What Is the National Automotive Industry Bill 2026?

Here is the honest answer: the full text and final provisions have not been widely published, and the bill has not been passed. From public statements so far, lawmakers and assemblers want it to:

1. Give the auto policy the force of law. Nigeria’s auto policy has mostly run on executive and fiscal measures, which can change with each budget cycle. Assemblers want rules that cannot be reversed easily.
2. Protect investment in local assembly plants. This is aimed at firms like PAN, Innoson and others that say they cannot plan long-term under shifting rules.
3. Raise local content. That means more Nigerian-made parts in vehicles, not just final assembly of imported kits.
4. Cut foreign-exchange spending on vehicle imports. Lawmakers repeatedly framed used-car imports as a drain on Nigeria’s reserves.

What the bill will not do on its own, at least not yet, is change today’s import duty, ban tokunbo cars or set a new age limit. Any such change would need to show up in the passed law, the Customs tariff or a fiscal policy update. Until then, treat headlines saying “tokunbo ban coming” with caution.

Where Import Duty on Cars in Nigeria Stands Today

The timing is interesting, because government policy has recently gone the other way on imports. In July 2026, Nigeria Customs Service Comptroller-General Adewale Adeniyi confirmed to the House of Representatives Committee on Customs and Excise that, under the 2026 fiscal policy:

• Used (tokunbo) vehicles: import duty cut from 15% to 5%
• Brand-new vehicles: import duty cut from 20% to 10%

He said the new rates began rolling out in May 2026. A Green Tax surcharge under the 2026 Fiscal Policy Measures also took effect on 1 July, and reports say it adds an extra levy based on engine size. Electric vehicles, CNG vehicles and locally made vehicles are reported to be exempt.

Duty is only one part of the landed cost. Clearing agents, port charges, the NAC levy, VAT, ECOWAS levy, transport and dealer margins all add up. Industry estimates put total import charges for popular tokunbo models like the Camry, CR-V or RX 350 at roughly 45–60% on top of the overseas purchase price, but this varies widely with exchange rates and the car’s assessed value. Always get a written breakdown from your clearing agent.

Lower duty has fed an import boom. Nigeria’s passenger car imports jumped about 145.6% to ₦1.18 trillion in the first half of 2026, as we covered in Tokunbo Car Imports Hit ₦1.18trn: What It Means for Buyers. That surge is a big reason lawmakers are now talking about “dumping.”

Local vs Imported: Where the Market Is Today

The new-car market is small but growing quickly. According to Focus2Move data, about 16,889 new vehicles were sold in Nigeria in the first half of 2026, up 85.2%. Innoson, a local manufacturer, led with a 38.5% share, and GAC came second with 12.8%. We broke down the full ranking in Best-Selling New Cars in Nigeria 2026: Innoson Leads.

Those numbers are tiny next to the tokunbo trade, which is still how most Nigerians buy cars. Here is how the main options compare for the average buyer:

Tokunbo (foreign-used) cars

• Pros: widest choice, familiar Toyota/Honda/Lexus models, spare parts easy to find in places like Ladipo, strong resale value
• Cons: hidden accident or flood damage, prices swing with the naira, clearing costs are hard to predict

Brand-new imported cars

• Pros: warranty, known history, financing options through dealers and banks
• Cons: highest upfront cost, still exposed to FX

Locally assembled cars

• Pros: warranty, local dealer support, usually exempt from extra import levies, may benefit most from the bill
• Cons: fewer models, and with local content below 4% at plants like PAN, many parts are still imported and priced in dollars

What This Could Mean for Car Prices in Nigeria

Nobody can promise how prices will move, because so much depends on what the final law says and on the naira. But based on what lawmakers have said, here are the realistic scenarios:

• If the bill adds tougher import rules (higher tariffs, stricter age limits or more inspection requirements), tokunbo prices would likely rise as supply tightens. Older and cheaper models would be hit hardest.
• If the bill focuses on incentives (tax breaks, cheaper loans for assemblers, government fleet purchases), locally assembled cars could become cheaper or easier to finance, without directly raising tokunbo prices.
• If the bill stalls, today’s lower duty rates stay in place and the import boom likely continues.

Separately, NADDC has said it plans pre-shipment inspection and certification for imported used vehicles. In December 2025, the DG said importers would bear inspection costs of about $250–$300 per vehicle, and cars that fail would not be allowed in. That cost could eventually be passed on to buyers.

What Should Car Buyers Do Now?

1. Don’t panic-buy. The bill is not law yet, and legislation in Nigeria can take months or years. If you need a car now, buy based on today’s rules and your budget.
2. Buy from verified dealers. NADDC’s dealer registration push is meant to protect buyers. See our guide to NADDC dealer registration.
3. Check customs papers. Make sure duty was fully paid on any tokunbo car. Unpaid or underpaid duty can lead to seizure later.
4. Inspect carefully. With rainy-season flooding and more imports arriving, get a trusted mechanic to check for flood and accident damage before you pay.
5. Compare local options. If you are already looking at new cars, get quotes from local assemblers too. Ask about warranty, parts availability and car loan options.
6. Watch for the Abuja motor fair. NADDC and BKG Exhibitions will host the 26th Abuja International Motor Fair at Eagle Square from 10 to 13 November 2026. The theme focuses on policy and local production, so expect more news on the bill there.

Key Takeaways

The Senate has promised to fast-track the National Automotive Industry Bill 2026, but it is not law yet and its full details are not public. Import duty is still 5% on tokunbo cars and 10% on new cars, per the Nigeria Customs Service. Local assemblers like PAN have big capacity but very low local content, so any real change will take time. For now, buy on today’s rules, use verified dealers, and keep an eye on the November Abuja motor fair.

FAQ

Is the government banning tokunbo cars?

No. No ban has been announced. Lawmakers have criticised used-car imports and pledged to pass a bill supporting local assembly, but the bill’s provisions are not final.

What is the current import duty on cars in Nigeria?

According to the Nigeria Customs Service, 5% for used vehicles and 10% for brand-new vehicles under the 2026 fiscal policy, plus other levies, VAT and clearing costs. Check the current Customs tariff before importing.

Will locally assembled cars get cheaper?

Possibly, if the final law includes strong incentives. But with most parts still imported, prices will remain tied to the exchange rate.

When will the bill be passed?

No date has been given. The Senate Committee on Industry has only pledged to speed it up.

Disclaimer: Vehicle prices, import duties and specs change frequently in Nigeria — always confirm current figures with the dealer or official source before buying.

This article draws on reporting by Leadership, Legit.ng, Blueprint and ThisDay, statements by the Nigeria Customs Service and NADDC, and Focus2Move market data.