Abuja motor show: Where’s the Nigerian car?

Nigeria spends about N400bn annually on vehicle importation. Some of the vehicles are on parade at the 14th Abuja International Motor Fair, which opened on Tuesday. But the nation has not given up on the search for a model car, 52 years after independence. RASHEED BISIRIYU reports

Modibbo Wagen, a locally assembled car designed in the mode of Volkswagen Beetle, was the revelation of the 12th edition of Abuja motor show.

But unlike the conventional Beetle, which has two doors, the local model is built with four doors.

The initiative by Mohammed Modibbo, a 42-year-old panel beater based in Zaki Biam, Benue State, has fizzled away.

A young man recently surfaced in Lagos with an ingenious product, an airplane-like car that can also function as a boat. He is still offering Lagosians a free show of the project. It is hope that his own effort will not go the way as Modibbo’s Wagen.

A few years ago, President Goodluck Jonathan was a special guest at the Abuja motor show. He was then an acting president and came to declare the event open.

His first observation was that in all the array of new cars on display, none was from Nigeria, in spite of the nation’s vast human and material resources.

But some 20 years ago, Nigeria was assembling Volkswagen Beetle and some Peugeot cars for its burgeoning middle class and small upper class people. The government also adopted Peugeot 504 and other locally-assembled models as official cars.

Jonathan had recalled that the efforts to manufacture a truly Nigerian car started before the establishment of Volkswagen of Nigeria and Peugeot Automobile Nigeria in the early 1970s.

Many years after that lamentation, the story has not changed even with Jonathan in the saddle as Nigeria’s President.

The 14th Abuja International Motor Fair opened on Tuesday; visitors to the Eagle Square venue of the show should expect to be dazed by the increase in the number of new cars and the drastic transformation in the engineering designs.

From German machine to American specs, hi-tech European cars to Japanese and Korean superbly packaged automobiles and now the Chinese and Malaysia wonder, many will find out at the show that the business of auto manufacturing has really moved up.

But the one question that will continue to agitate the minds of the people throughout the motor show and beyond is: where is Nigeria’s car? When will a locally assembled car be displayed at Abuja or Lagos auto show?

Vehicle manufacturing in Nigeria could be traced back to early 1960s when private companies such as UAC, Leventis, SCOA, BEWAC and RT Briscoe pioneered the establishment of auto assembly plants using Completely Knocked Down or Semi-Knocked Down parts.

Government became involved in the industry between 1970 and 1980 after sealing agreements with some automobile plants in Europe to set up two car and four truck/light commercial vehicles assembly plants in Nigeria using CKD parts.

The two car plants were Peugeot Nigeria Limited, established in Kaduna, and Volkswagen of Nigeria Limited in Lagos.

The four truck plants were Anambra Motor Manufacturing Company in Enugu, Styer Nigeria Limited in Bauchi, National Truck Manufacturers in Kano, and Leyland Nigeria Limited in Ibadan.

All the vehicle plants were privatised in 2007 after many years of inactivity.

In addition to that effort, the Federal Government had in 1982 concluded agreements with five auto manufacturers for the establishment five light commercial vehicle assembly plants: Mitsubishi in Ilorin, Nissan in Minna, Peugeot in Gusau, Isuzu in Maiduguri and Mazda in Umuahia.

But none was established. General Motors later entered into a fresh partnership deal with a private firm, UAC, to produce Isuzu by FMI of UAC, now GM Nigeria Limited.

Apart from PAN, which recently announced that it had commenced the production of a Chinese car, no locally assembled car is available.

Only NTM, VON Automobiles Nigeria Limited and Nnewi-based bus firm, Innoson Nigeria Limited, currently supply some assembled buses to the local market.

The Director-General, National Automotive Council, Mr. Aminu Jalal, said the nation was spending N400bn on importation of 200,000 used vehicles and 80,000 new vehicles annually.

He said this last year. The figure may have risen.

The NAC DG, who was a guest speaker at an event organised by the Automobile and Allied Products Sector of the Transport Group, Lagos Chamber of Commerce and Industry, said that Nigeria had the capacity to produce 150,000 units of vehicles annually with a total value of N550bn.

But he lamented that “the total current operating capacity for local assembly plants by value is N30bn,” and stressed that the local auto assembly or manufacturing plants could produce more vehicles than the nation needed.

Every manufacturer in the automobile industry, wherever it may be located, sees Nigeria as a viable market, especially in the Sub-Saharan Africa.

There is hardly any auto manufacturer that has not signed a franchise agreement with a local dealer to market its products nationwide. Some have more than one marketer/dealer.

Even now that there is a gradually a shift from used vehicles to new ones, the vehicle imports have significantly dropped.

Statistics of vehicle imports obtained from the Nigerian Ports Authority show a significant rise in the number of new vehicles over used or tokunbo vehicles.

For instance, while 4,000 new vehicles have been imported every month in 2012, importers bring in 7,370 used vehicles monthly. The new vehicles represent 35 per cent of the total vehicles imported in a month.

But in 2011, an average of 6,666 new vehicles imported every month represented about 28 per cent of the total vehicles (23,332) imported in a month.

The Chairman, MMQ Plus, and Publisher, Onwheels magazine, Mr. Baba Aina-Scot, said the inconsistency in the policy of government was largely responsible for the nation’s inability to build on the moderate past achievements of PAN and VON.

Aina-Scot, who spoke with our correspondent on the telephone, said there was little or no incentive for local auto manufacturers.

According to him, investors will be committing financial suicide to go into car assembly or parts manufacturing when people can easily buy imported vehicles and parts at cheaper prices.

He said the problem was not different from what led to the collapse of local textile and tyre industries.

He said, “There was a time when Nigeria had more than 90 textile manufacturing industries. They have all closed shops and turned their factories into warehouses. “And when the import duty on imported tyres was reduced from 40 per cent to 10 per cent, it became difficult for local manufacturers to continue to operate productively.”

Michellin was the first to quit Nigeria for Ghana, leaving behind only its marketing/sales section. Dunlop later followed.

Toyota supplies about 40 per cent of the new vehicles being purchased in the country.

Chairman, Toyota Nigeria Limited, Chief Michael Ade-Ojo, said it has been difficult to convince the parent company, Toyota Motor Corporation, to establish assembly plant in Nigeria. He cited poor state of infrastructure as a major factor.

The President, Coscharis Group, Chief Cosmas Maduka, also said the company, which markets more than seven top auto brands, including Ford and BMW, has no plan to set up an assembly plants as the environment is not right.

Jalal, however, said a few policy changes could alter the present situation and place Nigeria on a reputable position among auto manufacturing nations.

First, he called for an upward review of the import duty for SKD and FBU (vehicles) to discourage the importation of vehicles and make local assembly plants flourish.

“It is, therefore, recommended that the import duty on automobile FUB and SKD should be revised to 35 per cent and 20 per cent, respectively from the current 10-20 per cent,” he said.

The NAC DG recalled how seven auto manufacturers that indicated interest in establishing assembly plants in Nigeria between 2010 and last year had shelved the idea due to what they called low duty on imported vehicles.

Some experts agree that stakeholders must come together to discuss the issue and form a team to work on a bill to be sent to the National Assembly.

An online commentator on the subject, Midas, likens the making of Nigerian car to the construction of a house.

He said, “Contrary to what most people think, the concept of a Nigerian made car is not so much an engineering challenge; rather, it is one that presents an entrepreneurial and enterprise challenge.

“We need to stop re-inventing the wheel. Building a Nigerian car is no different from building a Nigerian house. Nobody builds a house by first starting a cement manufacturing plant. There are cement factories already in place to supply you. A builder does not need to be a bricklayer either, to build a house.

“In the same way, to build a Nigerian car, you will need to think like an entreprenuer rather than as a fabrication or mechanical engineer. As an entreprenuer who is investing time, skill and resources in a car manufacturing venture, you will need to understand that cars are essentially products that are made up of thousands of precision engineered components and modules that are assembled together to work in perfect synchronisation.” Punch

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