Auto industry: African investors on rescue mission in Nigeria

The federal government and African investors have acknowledged that Nigeria’s auto industry is performing below expectation.

The African Association of Automotive Manufacturers (AAAM) estimates that Nigeria manufactures about 10, 000 new cars every year and this is a far cry from South Africa’s 600,000 cars manufactured annually.

Data from the National Automotive Design and Development Council (NADDC) show that the bulk of Nigeria’s automobiles come from imported fairly used cars amounting to 400,000 to 500,000 cars yearly.

Recently, over 20 foreign investors and consultants from the automotive industry Nigeria in what the Minister of Industry, Trade and Investment, Dr. Okey Enelamah, described as a boost for the development of the automotive sector in the country and the rest of Africa.

The international investors, who visited Abuja, Lagos and Edo State to engage various stakeholders, were in the country to gain insight into business opportunities and investment environment in the Nigerian automotive sector.

Managing Director of Deloitte’s Africa Automotive Leader, Dr Martyn Davies, said the whole idea of the visit was to promote investor friendly regulatory frameworks and sustainable manufacturing of automobiles in Nigeria as well as promote infrastructure development, job creation, skills transfer and localisation programmes.

He said the association seeks partnership for the implementation of the National Automotive Industry Development Plan (NAIDP), halt the importation of second hand vehicles into Nigeria and engage banking institutions on vehicle financing models.

Vice President Yemi Osinbajo who met with the delegation said, “There have been some difficulties with the implementation approach, but this is the time we have considerable political will. If we can get the individual components right, we should be able to fly with this policy.”

The implementation of Nigeria’s auto policy has been shrouded in uncertainty with the federal government suspending the implementation long time ago.

However, there are moves at the National Assembly to pass into law a bill modeled on the policy.

While on the visit, the President of AAAM, Thomas Schaefer, told journalists that Nigeria has what it takes to play a leading role in the automotive industry in Africa.

He said Nigeria has the potential to produce two million cars annually, up from the current 10, 000 new cars per annum if the necessary policy is put in place.

“The plan is to have short, medium and long-term approaches that target growth in the manufacture of cars in Nigeria, similar to the over 60,000 cars produced per annum in South Africa,” said Schaefer.

The Nigerian government is also in agreement with Schaefer’s submission that Nigeria needed to halt the importation of used vehicles. a