The National Automotive Design and Development Council (NADDC) has dismissed insinuations that the Federal Government has jettisoned the National Automotive Policy owing to the poor Nigerian economy.
NADDC Director General, Engr. Aminu Jalal who described the allegation as baseless and unsubstantiated, said the Federal Government decided to explain the policy initiative as part of efforts to promote the automotive industry as an alternative to oil.
Engr. Jalal spoke in Lagos when he delivered an audio visual driven thesis titled: ‘How to make Nigeria Africa’s leading automotive hub’ at the Manufacturing & Equipment Expo.
He said: “It is already assured. The new government will continue with the policy, and the response so far has exceeded our expectations. Our emphasis has shifted to the development of automotive components.”
According to him, five South African companies have indicated interest in establishing component manufacturing plants in the country just as some Chinese investors have similarly indicated interest in exploring opportunities in the nascent auto industry.
The Nigerian automotive industry is designed to ensure survival, growth and development of automotive manufacturing, using local human and material resources with a view to enhancing the industry’s contribution to the national economy, especially in the areas of transportation of people, goods and services.
Engr. Jalal said no fewer than 14 assembly plants have since 2014 began operations, assembling new products including cars and SUVs like Nissan, IVM, Peugeot, Hyundai, Honda, Kia, Volkswagen, Ford, Changan and GAC.
Whilst in the bus and truck category, Hyundai, Ashok-Leyland, MAN, Anammco, Leyland-Busan, IVM, FAW, Sino, Shacman, Aston, Foton, Forland and Isuzu are among notable brands currently being produced at various facilities in Nigeria. This is in addition to Proforce armoured vehicles wielding installed capacity for over 300, 000 units annually, he affirmed.
Engr. Jalal said these plants, in 2015, contributed 75, 000 units of vehicles including concessionary imports representing 75 per cent of estimated 100,000 new vehicles that made it into the market during the period under review.
The industry is long-term in nature and requires policy continuity and constituency, the NADDC helmsman said, adding ”Nigeria is on track to becoming a vehicle manufacturing nation.”
“The Nigerian automotive development plan is our best chance of developing this vital industry and making Nigeria Africa’s leading automotive hub, especially when viewed against the market potential of ECOWAS and Central African countries estimated at one million vehicles annually.
“One of the convictions of the National Automotive policy is to have vehicle assembly operations with increasing local content absorption that could evolve from one stage to another, for instance from SKD2 (semi-knocked down) to CKD (completely knocked-down) operations without exceeding 12 months or maximum 36 months including a set-up period of 12 months,” he said.
This institutional framework is validated in article 5.1 of the National Automotive Policy, which states inter alia “there will be phased component parts deletion programme for cast, pressed and forged body and mechanical parts and trim/accessories with the establishment of relevant engineering infrastructures. And in item6.1,“Local and foreign investors shall be encouraged to establish automotive vehicles and component parts outfits.”
The NADDC director said the biggest multiplier effect of automotive manufacturing comes with component manufacturing, saying the more you localize the higher the number of jobs created, and the deeper you go downstream, the more jobs you create.
“Assembly operations alone account for about 15 to 20 percent of the cost of the vehicle. When you add local content you now increase the value added. We are hoping that within the next five years, we will reach value addition of about 30 to 40 per cent.’’
The Nigeria automotive industry is valued at $2 trillion annually with diverse scope for manufacturing, agriculture, defense, power generation, marines and aircraft engines.