Everything seems to be looking up for Nigeria’s automotive industry with the recent inroads made in the production/assemblage of locally-manufactured vehicles. ELEOJO IDACHABA in this report examines benefits.
In what looks like the era of Nigeria joining the league of developed countries, automobiles are now being manufactured, assembled and commissioned in the country. This is coming even as several companies are packing their bags and businesses out of the country citing unfavourable business climate as the reason.
Although scepticisms followed this technological breakthrough even in the government circles, the development, this reporter gathered, has come to stay.
In the South-east town of Nnewi in Anambra state, an indigenous vehicle manufacturing company by the name Innoson Motors has been making waves as it has since commenced the assemblage of high mobility vehicles comparable to any other one in any part of the world. The company, which commenced business a few years ago, is now a toast of several state governments, corporate bodies and lately security organisations whose state-of-the-art vehicles that were locally fabricated and assembled have been saving the country and the state their hard-earned foreign exchange from buying such vehicles from overseas.
Applause
Recently, the director-general, National Automotive Design and Development Council (NADDC), Mr. Jelani Aliyu, who was enthralled by the development, used the opportunity to commend the Road Transport Employers Association of Nigeria (RTEAN) for the procurement and commissioning of 2,322 Made-in-Nigeria gas-powered buses into its fleet of vehicles for all the 774 local governments in the country.
At the ceremony, Aliyu congratulated the chairman of RTEAN, Alhaji Musa Maitakobi, for the commitment, loyalty and courage to buy the Nigerian-built vehicles.
Impressed by this, he called on transport associations in the country to follow the footsteps of RTEAN and key into the National Gas Expansion Programme by patronising the locally-manufactured gas-powered vehicles.
“What was witnessed was a testimony to the fact that the implementation of the National Automotive Industry Development Plan (NAIDP) by NADDC is yielding results,” he said.
Benefits
In another development, bearing in mind the benefits of locally-assembled/manufactured vehicles, Aliyu called on African countries and research institutions to promote and adopt electric vehicles. According to him, the continent needs more electricity-powered means of transportation than other parts of the world.
He made the call while speaking at a United Nations’ workshop on environment in Nairobi on the theme “Shifting to Efficient and Zero Emission Vehicles in the Global South.”
He said: “The people of Africa themselves have incredible heritage and history from the times of the builders of the great pyramid of Giza to the reign of Mansa Musa of Mali, to the dreams, hopes and aspirations of modern-day Africans.
“These are dreams, hopes and aspirations which must now be realised to positively change the lives of every man, woman and child on the continent at an aggressive pace.
While discussing the successes achieved on electric mobility in Nigeria, he said, “We have put together a technical committee to work on and create a legal framework for the promotion, adoption, patronage and usage of electric vehicles in Nigeria to further expedite the development of electric mobility in the country.”
He noted that Hyundai Kona Electric Vehicle is assembled in Nigeria currently while Jet Systems Motors has the Jet Mover Electric Van.
“Max E is also developing an electric motorcycle and Phoenix Renewables with a view to converting mini buses from petrol to electric.
“NADDC has started the development of electric vehicle charging infrastructure with three pilots of 100 per cent solar powered EV Charging Stations located at universities to support technology transfer.
“The future must be achieved through ubiquitous and sustainable industrialisation, enabled by intelligent electric mobility to every relevant nook and cranny of Africa,” he said.
The good old days
Before now, a number of automotive companies existed in many Nigerian cities like Lagos, Kaduna, Bauchi and Kano. It is, therefore, not a surprise to hear of names like Peugeot Automobile Nigeria (PAN) in Kaduna, Volkswagen in Badagry Lagos, Steyr in Bauchi, Kia, etc. Except for Kia which still has a huge market in the country, others have somehow closed shop because of poor patronage, unfriendly business environment and inability to procure foreign exchange thereby leading to mass retrenchment of both technical and adhoc staff.
Good development
Nnena Azuka, a marketing officer for Dana Motors, on the entry of local automobile manufacturing companies into the Nigerian market, told this reporter that it “is a good one as it fosters healthy competition.”
“We are not bothered by competition because of our cutting edge advantage over indigenous companies just coming into the market. Of course, all our brands have been proven and tested over the years. We welcome them, it’s good for the industry and good for Nigeria,” he said.
An automobile business development manager, Emmanuel Paul, told Blueprint Weekend in Abuja that in Nigeria, the bulk of movements of persons and goods are done on the roads through the use of vehicles; to that extent, vehicles still remain the most potent form of movement, the reason for which he said governments all over the world, including Nigeria, still invest in vehicles manufacture.
He said: “Up until recently, Nigeria had relied on imports to meet the massive annual demand for vehicles and cover the gaps left unfilled by its fledgling automobile industry. In response, past and present governments have come up with different policies in the name of improving local vehicle manufacturing.
“Through strategic partnerships during the oil boom of the 70s, Nigeria housed vehicle manufacturing plants from several global giants like Nissan, Peugeot, and Volkswagen as well as indigenous players like Anambra Motor Manufacturing Company Limited (ANAMMCO).
“Unfortunately, irregular policies and an increasingly harsh economic environment caused several of these companies to shut down their operations, but owing to inevitable circumstances today, everyone is now looking inward.”
In the past years, Nigeria had an estimated market of 720,000 vehicles per year, but less than a fifth of these vehicles were locally manufactured. The rest were dominated by used imports. Investigation shows that Nigeria is the world’s third-highest importer of used cars in the world as she imports over 200,000 vehicles a year.
The prevalence of these cheap second-hand imported vehicles, also known in local parlance as Tokunbo, had been a thorn in the flesh of domestic manufacturers. However, as if to meet the huge demand for cars, in 2021, the federal government announced a drastic cut in import duties on various brands of cars. For instance, it was reduced from 35% to 10% for goods vehicles while passenger vehicles were reduced from 35% to 5%. Most of these vehicles come from Europe, Japan and the United States of which a huge amount of foreign exchange is required to import them.
“As of today, the impact on the sale of locally-produced cars is not yet discernible, especially amid generally suppressed local economic conditions.
In Nigeria today, Innoson Motors, for example, has become a toast to many lovers of exotic cars, just as it is with Kia, Toyota, Mercedes car and Hyundai products.”
Current market trend
At present, Nigeria has 14 functional automotive plants. Their combined production rate is put at under 50,000 annually despite the fact that the actual needs are between 720,000 and 750,000 vehicles per annum.
In view of this, the government has also resolved to take all the vehicles produced by the local assembly plants as part of its relief package to the automotive sector. The Zainab Ahmed, the minister of finance, stated this recently while responding to the allegations that the government was deliberately stifling local auto makers with the slash in tariff for fully-built vehicles which forms part of the controversial Finance Act 2021 as it puts local manufacturers at a great disadvantage.
According to her, the government has started discussing with local automakers with a view to patronising them in line with the Executive Order 003 which makes it mandatory for government ministries, departments and agencies to buy made in Nigeria products, including automobile products.
“The federal government has a commitment to buy made- in-Nigeria vehicles; so, the federal government would stand with that commitment and buy all the vehicles that these assembly plants in Nigeria produce and we would engage the state and encourage them and local governments to do the same. This is a time-bound relief,” she had said.
