“Today, car manufacturing and assembly have been reportedly described as a high risk portfolio for investors to pursue in Nigeria”
The above quote is a wholesome view of Nigeria’s economy portraying the manufacturing sector as window and a vital component capable of placing Nigeria comparatively in the forefront of car production, with other giant car makers in Africa, and the rest of the world.
Determined to ensure a vibrant and competitive transport sector with a view to create jobs for Nigerians, government took a bold step by setting up six assembly plants, two for cars and four for trucks between 1970 and 1980 since cars are essentials means of transportation to Nigerians. These plants were Volkswagen of Nigeria (VWON), Lagos, Peugeout Automobile of Nigeria (PAN) in Kaduna, Anambra Motor Manufacturing Company Limited (ANAMCO), in Emeni, Enugu; Steyr Nigeria Limited, (Bauchi), National Truck Manufacturers (NTM) in Kano, for flat trucks and Leyland Nigeria Limited in Ibadan.
However, due to the defective and sycophantic automobile policy put in place by government, lacking a strong Nigeria content and process, these indigenous car companies became moribund and is currently on life support.
Car production in Nigerian has failed so many times in the early 80’s and 90’s primarily because, the sector lacked adequate technology to manufacture, especially electricity supply, high cost of production, due mainly to the importation of the necessary raw materials from overseas and the failure of the Nigerian steel making company Ajaokuta Rolling Mills to take off successfully grounded this noble project.
Also, the acceptance of smaller and technologically fast cars from “all over the world” and the unrestricted importation of Tokunbo (used) vehicles made things difficult for automakers.
This process rendered Nigeria’s assembly plants uncompetitive, which were initially designed to fit production of lower technology vehicles. The high demand for fairly used cars in Nigeria mainly for Toyota and Honda cars due to their durability, availability and low maintenance cost crippled government’s strategy to encourage backward integration for the industry.
The transport sector was suppose to be one of the critical components of the national economy, contributing to the overall economic development. Unfortunately, this has been stifled by an unfriendly automotive policy by government.
It would be recalled that the administration of former president Goodluck Jonathan had approved a new National Automotive Industrial Policy Development plan for the country in October 2013, with the aim of transforming the Nigerian automotive industry and attracting investment into the sector.
Hence, the former Minister of Trade and Investment, Dr Olusegun Aganga stated that “A transformed Industry will realize its potentials as a major driver of economic growth and diversification, job creation, local value addition, and technology acquisition”. The policy was actually targeted at replacing imported vehicles with locally produced ones.
Though, Messers, Innoson Vehicle Manufacturing Company Limited based in Nnewi, Anambra State, launched its fleet of locally-made vehicles IVM G5 Jeeps recently, not much has been seen of this brand, Where are the vehicles on Nigerian Roads; why have we not see these cars proudly branded in Nigerian name and logo?
Analysts have authoritatively confirmed that for every two cars on Nigerian roads, one is a Toyota and the other can be any brand like Mercedes, Volkswagen, Nissan, Honda or Kia e.t.c. As almost 50 per cent of the vehicles on the road in Nigeria are produced by the world’s biggest automobile car maker Toyota.
These foreign brands have been modernized with the technology of efficiency, functionality, and standardization of fuel injection engines which have made our local brands to become antiques.
Today, car manufacturing and assembly have been reportedly described as a high risk business portfolio for investors to pursue in Nigeria.
Consequently, the business of car production with Toyota leading the pack. Toyota is currently a leading brand in Nigeria with Toyota Nigeria Limited as its main distributors. Honda cars are distributed by Stallion Motors.
Mitsubishi is distributed by CFAO Motors, while KIA is distributed by KIA Motors in Nigeria. They have all grabbed a large percentage of Nigeria’s auto market through corporate and government patronage.
To turn the tide, we hope to see if the policy of President Muhammadu Buhari will work positively to make Nigeria’s auto industry attractive to foreign investors and Nigerians alike. Even as NISSAN has taken advantage of the policy by being the first multi-national in Nigeria to manufacture new vehicles locally.