Automotive Industry Investors Ask Nigeria to back up its policy with law

Business News

“Over 20 foreign investors and consultants from the automotive industry have requested that Nigeria’s new automotive policy be passed into law as it has the potential to activate their investments and unlock the growth of Africa’s automotive sector.”

The international investors in the African automotive industry visited Abuja, Lagos and Edo State recently to gain insight into the opening business opportunities and investment environment in the Nigerian automotive sector; assist in the shaping of national and state policy to support industry overall and domesticated manufacturing for the automotive sector; and gain insight into the automotive sector & potential for enhanced manufacturing in Nigeria.
Thomas Schaefer, the Chairman and Managing Director of Volkswagen Group South Africa, who led the delegation, said that their business intention in Nigeria is to domesticate aspects of their manufacturing and supply value chain.

“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,” he said

Nigeria’s Minister of Industry, Trade and Investment, Okechukwu Enelamah, who was the host of the delegation, said: “We are excited by the role the automotive industry plays in the strategic and catalytic economic development of countries and we are committed to developing the sector speedily to facilitate the economic diversification of the country.”

The achievements made so far

Presently many assembly plants in the country are in operation. Over 14 existing assembly plants like Peugeot Automobile Nigeria Limited (PAN), Innoson Vehicle Manufacturing Co. (IVM), Anambra Motor Manufacturing Company (ANAMMCO) and Leyland-Busan have started assembling new products since 2014, and new ones have been established.

Before this policy, three out of the five assembly plants established in the 1970s had become moribund. However, under the policy, 29 out of the 54 licensed Assembly Plants as at February, 2018 are now operational. A total installed capacity of 419,190 units and a total actual production of 8,628 units have been achieved so far.

Also, Dangote Sinotruk West Africa LTD, a Joint Venture with total investment of $100million for truck assembly will assemble and produce full range of commercial vehicles covering heavy duty truck, medium truck, light truck and other semi-trailers etc. It aims to meet an expected current demand of these segments of automobiles required for logistics, construction, food & beverage industries in Nigeria as the government focuses on boosting economic development across the country. The company has installed capacity to assemble and produce 10,000 trucks annually and this alone will create 3000 jobs across Nigeria.
Another example of the positive results of the automotive policy is the growth of ANAMMCO. The company downsized its staff from 2011 due to the unfavourable conditions. The downturn in business also affected employment down the value chain. With the revival of manufacturing, ANAMMCO recalled 200 of the staff that had been laid off. The company is currently waxing stronger and has received several proposals from Original Equipment Manufacturers interested in establishing local assembly presence.

Leave a Reply