Domestic production of vehicles in Nigeria hit 45,000 units per annum

By Jared Oundo

Jared OundoLike cement, Nigeria appears to be on the track towards becoming vehicles manufacturing country again as local production has increased to 45,000 units per year, up 80 per cent from 25,000. Based on this growth, PricewaterhouseCoopers (PWC) has projected that the Nigerian auto industry is expected to produce about four million cars annually by 2050. Also, with this development, Dr. Innocent Chukwuma, Chairman, Innoson Vehicles Manufacturing Limited, IVM, said: “After sometime, Nigeria will manufacture cars for the whole of Africa.” Recall that in the 1980s; about 120,000 brand new vehicles were being assembled in the country by six assembling plants made up of two car plants and four commercial vehicles plants.

car

The industry collapsed when government embraced World Trade Organization’s free trade policy and opened up the country’s borders to imports including second hand vehicles. Breakdown of the units of vehicles Vanguard‘s investigation revealed that the industry is gradually picking up again as data from National Automotive Design and Development Council (NADDC) has revealed. The document showed that “Up until 2015, Nigeria imported about 400,000 vehicles (100,000 new and 300,000 used) valued at $4.2 billion. Local production capacity is about 300,000, but utilization is currently at about 15 percent of installed capacity. This translates to 45,000 units of vehicles per annum.” NADDC, while not giving the detailed breakdown of the units of vehicles each company produces, said: “The response to the federal government’s automotive policy by the new investors so far has exceeded our expectations. The current status of implementation of the policy is that the 14 existing assembly plants like VON, PAN, Innoson, Anammco and Leyland-Bussan had started assembling new products in 2014, and new ones were established, assembling the following: Nissan, IVM, Peugeot, Hyundai, Honda, Kia, VW, Ford, Changan, GAC, Cars, SUV and light commercial vehicles; Hyundai, IVM, Nissan and Ashok-Leyland buses; MAN, IVM, Sino, Shacman, MAN, FAW, Aston, Foton Fordland and Isuzu Trucks; and Proforcearmoured vehicles.

Nissan Infiniti production

The total installed capacity is over 300,000 units per annum. NADDC said: “By December 2014, the existing assembling plants had commenced operation at various capacity levels to offer existing brands out of new relationship with new Original Equipment Manufacturers (OEM). Production of Chinese multi-brands PAN (former Peugeot) in Kaduna resumed the assembling of Peugeot cars, ANAMMCO in Enugu now produces Shacman Trucks of China, and Leyland-Bussan of Ibadan sustained its production of Chinese multi-brands including NISSAN, VW and HYUNDAI cars and SUV, ASHOK-LEYLAND buses. Innoson Vehicles Manufacturing (IVM) added cars to its commercial vehicle assembly operation; Nissan, VW, Hyundai, KIA cars and SUV, Shacman, Sino FAW and MAN Trucks and Ashok-Leyland buses are now assembled in Nigeria.” Also, it was further learned that 12 new companies, including Honda and Century Auto (Toyota), TATA, Coscharis Auto (FORD, Joy long , Dongfeng), Globe Motors (Higer), Leventis (FOTON-Diamler), KewalramChanrai (GM, Mitsubishi) and Tilad (Shinery), Aston have been given bona-fide manufacturing status and are on track to start assembly operations in Nigeria.

car kshis

Director General NADDC, Engr. Aminu Jalal, said: “The industry is long-term in nature and requires policy continuity and consistency. This is already assured as the new government has decided to continue with the policy. Nigeria is therefore on track to becoming a vehicle manufacturing nation.” Hindrances to full capacity utilizations Vanguard further learned that the existing plants owners are being hindered to fully utilize their production capacities now due to some bottlenecks.  Engr. Luqman Mamudu, Director, Policy and Planning at NADDC, said that one of the problems is logistics. “To order your SemiKnocked Down, SKD, and Completely Knocked  Down, CKD, from the sources take quite a while,  and the bureaucracy is strangulating, so you  find that most of the operators are not able to get their inputs, that is the kits, into their plants as at when due. Influx of second-hand vehicles:”We also have the problem of second hand vehicles. Something needs to be done about this influx of second-hand vehicles, because second-hand vehicles reduce the market that is available to local investors.”

However, a PWC report presented by a Partner at the firm, Mr. Andrew Nevin, explained that the projected growth requires sustained and effective investments in the auto industry made only possible by the government implementing political, economic and legal policies that create a suitable environment for such investments. Nevin who did the official presentation of the PWC auto industry report, during a seminar organized by the automobile and allied product group of the Lagos Chamber of Commerce and Industry (LCCI), recently, said “We created three scenarios in this case depending on growth rate and the government support to the auto industry, By 2050, production in this country will hit almost seven million vehicles and imported used vehicles popularly referred to as ‘Tokunbo’ cars will become non-existent by 2034 as a direct result of local production. “We believe that by 2050, Nigeria should produce over 4 million vehicles. We have also created a pessimistic scenario, which is the third scenario because the world might not turn out the way we think, but even with the pessimistic scenario, Nigeria will be producing about two million vehicles.

Jubilant Stewards of Africa

Essentially, PWC is saying that by 2050, Nigeria is going to be a market that makes at least four million new vehicles a year and would also stop importation of used vehicles. Importation of used vehicles “There is also going to be the need for experienced car people, Nigeria can achieve its potential to produce over seven  million cars by building and working with people that really understand  the industry. We believe that the Nigerian auto industry in 2050 would be producing up to four to seven million cars, but it needs the support of the government policies and the industry to do the right things,” he said. Speaking at the 9th Bola Tinubu Colloquium, with the theme: ‘Make It in Nigeria,’ Chukwuma, Chairman of IVM, said   ”most of the companies in Nigeria are assembling cars, but IVM doesn’t assemble, we are manufacturing cars, not assembling. We are manufacturing cars with the support of Nigerians and after sometime, Nigeria will be manufacturing cars for the whole of Africa.” Investment incentives: Vanguard learned that under the new automotive industry policy, the federal government has put on the table, the following incentives, among others: “Import duty for CKD for vehicle assembly is zero per cent while that of fully built up units is 35 per cent; Import duty for SKD assembly is 10 per cent; import duty for automotive assembly operation equipment is zero per cent. Also, the Nigerian government has mandated all its ministries, agencies and parastatals to patronize the products of local automotive assembly plants.

Jared Oundo

Jared Oundo

Jared Oluoch Oundo, Econ. MU, MEC, is the best-selling author of the famous Chemistry of Success as well as other titles such as Fertilize Your Dreams, Awakening the Academic Giant, Position Yourself for Excellence among others. Jared Oundo is a gifted business counselor, consultant, trainer, excellence crusader and Communication & Public Relations strategist. Over the years Jared has diligently dedicated his life in helping people realize their purpose in life through various mentorship programs. Jared also serves as an adviser to various executives. It is worth noting too that Jared is pious minister and a good governance advocate. He serves as one of the editors and Researchers for this publication. Jared Oundo is also the Editor-In-Chief of various publications owned by different companies.

One thought on “Domestic production of vehicles in Nigeria hit 45,000 units per annum

  • December 13, 2017 at 10:39 pm
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    Nigerian only talk big grammar but lack innovation skill and to worsen the matter the Government lack planing and inability to creating good environment for businesses to the country Nigeria is a place where church Pastor claim to be God thereby adopt any means to defraud members at will The emergence of Daddy freezy might help Church members to know that Pastor in Nigeria are fake whenever given sermon on tithe .Most pastors get rich at the expense of their members even when the same church members children cannot be qualify to go to the same university built with church money. These Nigerian pastor over the years known as a courier to transfer public loot,and equip with voodo medicine and to speak in tongue and arrange people to demonstrate the public they can heal the sick . Only in Nigeria Churches and mosque built in every nooks and corners . The rate of human kidnapping and removal major organ after killing at alarming rate in The Yoruba long history human ritual and spread like wild fire to other tribes in the country. Human Cannibal are very common in eastern Nigeria for long time till date Human slavery cannot succeed by Arabs without some Nigerian involvement . Governors and Politicians are number one enemy of of the country in terms of human ritual as to clinch position not to mention massive corruption presence in the country for decades . Nigerian are number one enemy of themselves until they are ready to address and ready to solving all of the afore mention problems themselves no other nation can ever come up with any solution .

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