Nigeria has enough vehicle assembly plants – Expert
An expert in the automotive industry, Dr. David Valentine Obi, has expressed his support for the recent suspension of issuance of licences for new vehicle assembly plants on the ground that Nigeria has enough of them already.
The Federal Government had last week announced the suspension, except for direct investment by original equipment manufacturers.
A statement signed by the Director-General of the National Automotive Design and Development Council (NADDC), Engr. Aminu Jalal, explained the move was to enable the council consolidate the vehicle assembly operations and concentrate on developing local content.
Jalal stated that the council’s “major objective is to bring back completely knocked down (CKD) automotive assembly and develop local content,” adding that the council is investing over N5bn to establish automotive test centres that will ensure that vehicles and components made in Nigeria meet international safety and environmental standards.
Dr. Obi, who is the Managing Director/Chief Executive Officer (CEO) of DVC Limited, a company that specialises in the manufacturing of automotive chemicals, said the federal government acted in the interest of the country’s automotive industry.
Information from the NADDC indicates that the country currently has 14 existing assembly plants. They include VON Nigeria Limited, PAN Nigeria Limited, Innoson Vehicle Manufacturing Nigeria Limited, ANAMMCO Nigeria Limited, Leyland-Busan Nigeria Limited, NTM Nigeria Limited and Steyr Nigeria Limited.
NADDC revealed that Nissan, VW, Hyundai, Kia, Honda cars, Honda SUV, Shacman, MAN trucks and Ashok-Leyland buses are now assembled in Nigeria.
In addition, 11 new companies, including Century Auto (Toyota), TATA, Coscharis Auto (Ford, Joylong, Dongfeng), Dana Motors (Renault), Globe Motors (Higer), Leventis (FOTON-Diamler) and Kewalram Chanrai (GM, Mitsubishi) have been given bona-fide manufacturing status and are on track to start assembly operations this year.
Commenting on the operational status of these assembling plants, Dr. Obi, who represents auto manufacturers in the Manufacturers Association of Nigeria (MAN) said some of the assembly plants have not even started Complete Knock Down (CKD) assembling and “you don’t know whether they are serious or not.”
Dr. Obi argued the development would lead to the development of local content in terms of volume being produced by the existing licensed plants.
Debunking the claim that the move would affect the import of auto parts into the country, he said, “We are talking about assembling, not what you import.”
He said high import duty and tariffs can be used to regulate auto products imported into the country and “if anyone can afford the cost, they are free to do the imports.”
He said the suspension would instill discipline in the automotive industry and encourage small and medium enterprises (SMEs) in auto manufacturing.
Insisting that the move is in line with the Auto Policy, he said, “You know the SMEs who will do the supply are the greatest employer of labour and they contribute highly to the GDP.”
However, Nigeria is yet to implement the Nigerian Automotive Policy as scheduled and this has raised dusts in the auto industry.
The policy, aimed at curtailing ‘tokumbo’ vehicles and encouraging local manufacturing and assembling of vehicles, imposed 35 percent levy and duty on imported vehicles.
The commencement of the implementation of the policy slated for July 1 this year was shifted after the general elections, a fourth shift in the date of implementation in a year.
The FG first moved the implementation from July 2014 to January 2015, then to April and subsequently to July 1st, a development described as “lack of political will to pursue longterm industrial development” by the Nigerian Automotive Manufacturers Association.
The NADDC blamed the postponements on the delay in the establishment of a vehicle finance scheme.
In a swift reaction published as advertorial recently, the auto manufacturers’ association countered the policy somersault, insisting that it was not convinced by government’s statement that the scheme was being deferred for the proposed vehicle financing scheme. It attributed the reversal to what it deemed lack of will to implement the policy.
The manufacturers feared their investments would be at risk as the postponement would lead to further flooding of the auto market with used vehicles from other countries. CFAO Motors Nigeria Limited has announced the launch of its new Mitsubishi Fuso trucks in Nigeria.
Speaking at the launch in Lagos, Head, Regional Centre Africa, CFAO, Mr Rajaram Krishnamurthy, said the introduction of the new trucks was in line with its company’s quest for innovation and quality that would give customers value for their patron.
Krishnamurthy said “Today’s milestone represents another successful launch for Mitsubishi Fuso Truck and Bus Corporation (MFTBC), one of Asia’s leading commercial vehicle manufacturers, under its continual growth offensive in Africa following the recent launches in Kenya, Tanzania, Uganda, Ethiopia, Zambia and Mozambique.”
Krishnamurthy, who said Nigeria is one of his company’s strategic markets in West Africa, disclosed that CFAO intends to significantly increase the market share for its Mitsubishi Fuso brand, in close cooperation with its local distributor.
Leventis vehicle assembly