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234 Naira Forum / Autos / I sold my car, used the money to buy a house — Shitta (1 Post | 497 Views)
I sold my car, used the money to buy a house — Shitta by adminchuck(m) : 7:21 pm On Nov 06, 2016
The Chief Operating Officer, Sheteef Carshop, Mr. Abdul-Lateef Shitta, tells TOBI AWORINDE about his love for automobiles
How did you end up in the automobile industry?
I studied Accounting and Finance at the Yaba College of Technology. I trained with a firm of chartered accountants, Adetona Isichei and Co., as a management trainee for a couple of years. Then between 1997 and 1998, I resigned and set up my company, Sheteef Intertraders Limited, which engaged in general trading, manufacturing, and transportation from inception. The name was derived from a hybrid of my first name and surname. When I resigned, I started with sewing local attire and exporting in the ’90s. Then I started running an ice factory called Solid Ice, catering to parties with renting chests, cooling trucks — addressing a specific need in party planning. The aim was to relieve our customers of the headache of general icing. We realised that they spent so many millions organising parties, but they would forget that they had to ice the drinks, until the day when all the drinks are on the ground. So, we came in and provided that.
I was doing that alongside my management training when one day I went to work with everything at my factory working perfectly, and I returned to find that we had a power failure. That power failure lasted six months. That culminated into ruining the machines. They broke down one after the other because we kept running on diesel to make ice blocks. We were buying N5,000 worth of diesel to make N5,000 worth of blocks. We would then keep the same ice till the weekend before we would sell. We began to run at a loss because we couldn’t survive on generators. The generators as well as the machines broke down. That was the end of the business.
We decided we wouldn’t give up easily, so we moved to Ijora, where there was a priority (power) line by the (now defunct) National Electric Power Authority headquarters. But it was the same scenario. I then started my next business, a cyber café and Internet telephone service provider. Again, power failure. The computers would trip off, the base station kept blowing up, all the equipment kept burning, etc. One day, I sat down and asked myself: What can I do in Nigeria that, power or no power, my business would not suffer? That was when I decided to go into the car business.
Did you ever attempt the auto business before then?
Yes, I had always been buying and selling cars when I had spare cash. I had always loved cars; I would drive lifestyle cars, keep them well. Lifestyle cars are the likes of convertible and two-door cars; cars that are not conventional for, everyday use. They are luxury products, more like collector’s items. One thing I realised about cars was that if you kept them very well, you could get back even more than what you bought them for because of inflation. You can then add some money and get another one. If you insure it, even in accidents, you will get your money back.
If you get a luxury car and you maintain it well, the longer it stays with you, the more valuable it becomes because somebody who has been looking for it that probably couldn’t afford it when the car was first designed will one day see it with you and you can make a killing out of it. I’ve bought a house from selling a car. In 1997, I sold my 1995/96 convertible BMW 3-series and used the same money to buy a house on Akerele Road (Surulere, Lagos State). You don’t lose money from buying exotic cars or taking good care of your car.
What lessons from your experience in the fashion industry are you applying in your auto business?
For whatever reason, in Nigeria, as soon as you set up a business and it’s flourishing, everybody begins to have ideas of how they want to compete with you, regardless of whether or not they have what it takes. ‘Ah! Oga is making money.’ You go out to source for contracts and finally get the job, then delivering becomes an issue. It is when you have a deadline to meet that the tailors disappoint you. They would just disappear. And how many (tasks) can you do yourself. After trying that and the icing business, I told myself: ‘You know what? With the car business, I can work all day without anybody. I can drive my car, take it to the car wash, take it to the mechanic, put it on display, and sell it. I started with one car which I bought in 2005.
What did you do differently that enabled you to succeed?
I initially tried moving to England to do my master’s. It didn’t work out, so I came back and I started the car business. I then realised that a lot of people had so many cars abandoned with all sorts of car dealers which were unattended to. Some of them just needed the engine to be serviced, some just to spray the bumper, fixing side mirrors, fixing radio and other little things. But everything would be left in tatters, the cars would be left for months on end and nobody would buy them. So, I reached out to people that had cars which were not well attended to and had taken longer than necessary to sell. I used my money to refurbish them, documented the costs and sold the cars. As soon as I sold the cars, I would deduct my cost, get my commission, remit the client’s money and everybody would go home smiling. It worked like magic.
People began to refer one another: ‘There is one guy at Western Avenue. Just give him your car and, whatever it is, he will fix it with his money and help you make much more.’ By the second year of being in business, I headed for the island. I had the opportunity of having another property in Victoria Island, so I moved. Upon getting here (VI), it was the same case. A lot of people in Lekki had so many cars in their compounds and in front of their houses and they wouldn’t know who to give the cars to, to sell. People would go abroad, use their estacode to buy cars, bring them to Nigeria and wouldn’t be able to find anybody to buy them. Some were abandoned for six months to a year. It was all about doing things right, proper packaging and presenting in the most appropriate way. That is what we have been doing to date.
What challenges have you encountered?
Along the line, we were able to gather some capital with equity from family members and we began to import brand new cars from Dubai (United Arab Emirates) — Toyota Prados, Hiluxes, and Camrys, until the government decided to jack up the duty rates. Since it wasn’t sustainable to import, we decided to keep recycling the local ones. Abroad, nobody imports; they recycle. The same way there is a ‘brand new’ section, they have the ‘used cars’ section. So, someone can bring an old car and trade it in for a new one. Someone else who cannot afford the new one then comes in to buy the used one. The used one would have gone to the workshop for refurbishing. It is a cycle. Everything still remains within the system. Everything pertaining to your automobile need, you get in one spot. We have cars for rent, for lease, and for sale. That’s why we call it the Car Shop.
Are there improvements you wish to see in the public sector?
Movement is one of the necessities of life. We must move, just as we must eat, breathe and sleep. Movement from one place to another is dependent on mechanised locomotion. You cannot walk from here (VI) to Surulere. You have to go by either train, bus or car. If everybody must have a car, because we don’t have the right social infrastructure, how is the government providing affordable transportation? Can’t we get some rebate tickets? For instance, if you are a civil servant, you go to your ministry, buy discounted tickets and you can travel everywhere. Then there would be lower demand for cars. Is there a dedicated route on the road, like the red line they have abroad, for buses and bikes? Let people ride on bikes.
Today, before I employ anybody, the first question I ask is, ‘Where do you live?’ The reason is that I have realised that most of my staff, over time, spend about 40 per cent of their salaries on transportation. So, how do they survive? (That would mean) they will be corrupt one way or the other because they are under pressure: They have to pay their children’s school fees, feed, look good, fend for themselves, and transportation is number one because they must get to work to get that salary. So, whether they like it or not, they will pay for the transport. And somebody has to collect that money from them and that is where the car dealer comes in. In essence, government needs concerted efforts to ensure that cars are produced locally, transportation from one place to the other is provided at the most reasonable price, and subsidised one way or the other.
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