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Monday, 9 February 2015

Local Auto Makers To Exceed Nigeria’s Vehicle Market Share In 2015

Local automobile manufacturers and industry experts have given great forecast for Nigeria’s automobile industry in the New Year.
The local manufacturers described 2015 as the year to break even, amidst observable sharp increase in automobile industry investors’ confidence in the new National Automotive Policy, which seeks to revive Nigeria’s local automobile manufacturing industry.
With over 20 automobile assemblage plants that began operation this year, according to data provided by the National Automotive Council (NAC), the manufacturers said they are set to exceed the 50,000 units new vehicles market share known as the country’s average benchmark in the last few years.
With the federal government bent on creating a robust market for locally made vehicles, the Nigeria Customs Service is expected to execute full implementation of the tariff arm of the country’s National Automotive Policy, which places a whopping 70 per cent tariff on fully built cars and used vehicles, while leaving local automobile manufacturers with only 20 per cent tariff on completely knocked down units (CKDs).
Stallion Nissan Motors
Leading local auto maker and largest distributor of new vehicles in the country, Stallion Nissan Motors Nigeria Limited plans to build 6,000 vehicles at its Lagos assemblage plant by 2015.
The forecast is a huge leap from 600 units which the company built as at March, 2014 when it closed accounts for the year.
The Nissan Patrol, a high-end jeep favoured by government officials, Nissan Almera and South African-modelled MP 300 pick-up vans are the three Nissan brands being built in Nigeria currently by Stallion NMN.
Hyundai Nigeria, another subsidiary of Stallion Motors will build over 10,000 units of its low-end i-Grand, the latest Nigerian-made car that has weakened the used car market.
Stallion’s group managing director, Mr Parvir Singh said the federal government has taken care of certain aspects of the country’s new automotive policy with which it seeks to develop production of cars and buses in Nigeria.
Assuring of the quality of cars and other vehicles assembled in Nigeria, the Stallion boss said, “government is monitoring every aspect of the process and every progress made gets certification from government.
“Manufacturing passenger vehicles is highly complex, unlike commercial vehicles. Vehicle manufacturing is a good process of industrialisation and nobody can short-circuit the process. This process is what we are following.”
As a typical backward integration plan, the auto policy provides a leeway for local auto makers, who will pay only 20 per cent tariff on CKDs compared to 70 per cent tariff on the fully built units (FBUs). About 50,000 new cars are imported into Nigeria annually.
Singh said the figure is not a cumbersome mark for all the automakers currently producing new vehicles in the country.
“The figure is even little for some three manufacturers. What I think we need now is more investment in social infrastructure by government. There is dearth of local skills,” Singh said.
Stallion’s assembly plant in Ikotun, Lagos, will also this year begin manufacturing of series of indigenous brands to be named “Stallion” which would be a totally Nigerian brand.
“Government is investing a lot of money in terms of duty saving from the manufacturers.
Innoson, PAN, Dana, Kia, Renault
Other leading automobile manufacturers include Innoson Motor Company, Peugeot Automobiles Nigeria (PAN) Limited and Dana Motors, which will begin manufacturing of Kia and Renault brands at its Isolo Lagos plants this New Year.
In 2014, PAN signed a new deal with its original partner, Automobiles Peugeot, France. The company is providing technical support to PAN Nigeria to assemble vehicles and manufacture CKDs in 2015.
PAN’s managing director, Alh Ibrahim Boyi stressed that part of PAN’s come-back plan is to maintain robust support centres across the country this year, with Lagos being a major focus.
“We are going to spread our after-sales centres so that when people have to repair our cars, they will have a place very close to them.
“Our cars today are really very competitive in performance and price and energy efficiency. We want to bring the good memories back to Nigeria. All products from us are domesticated for Nigeria and we have maintained that heritage and have to regain our leadership in Lagos market,” he said.
The Peugeot 301, 4008, 3008 and the Peugeot 508, all of which come in automatic transmission are leading brands assemble at the company’s Kaduna plant. Boyi said PAN had completely revamped its distribution network with new technical skills provided to staffs of distributors.
With its planned N10 billion Ikorodu plant which began operation this year, the Kewalram Chanrai Group, has dropped a forecast of 15,000 units for 2015.
The executive director of Kewalram Chanrai Group, Mr Raju Sawlani his company had seen a veritable window in Nigeria’s new National Automotive Policy and had tied up with FOTON, a Chinese automaker to begin assembling the company’s cars, buses and other vehicles in Nigeria.
“The group is known for setting up local industries and believing in backward integration. With the re-introduction of the auto policy, it has become imperative to set up local automobile assembly,” Sawlani said.
“I have strong conviction that the auto policy would transform the nation’s industrial landscape, leading to an increase in skills development, and conserve valuable foreign exchange,” he stressed.
Also this year, the local automobile assemblage and manufacturing industry is expected to generate about 100,000 direct and indirect employments.
Spokesman for Stallion Motors, Mr Manny Philipson said over 400 people, with over 95 per cent Nigerians have already been engaged at the company’s plant.
PAN Limited and the Kewalram Chanrai Group, also said their plants in Kaduna and Ikorodu respectively would each create about 300 direct jobs. A human resource manager, Mr Nnamaechi Frank said for each hundred workers directly employed by the auto companies, over 10,000 people would gain some forms of employment while directly or indirectly serving the automobile manufacturers.
“On job creation, the implication can beat our imaginations. From distributorship to roadside repair service providers, hundreds of thousands can be engaged meaningfully,” Frank said.
“If government stays on the policy, millions of people can be employed indirectly, and this is what matters most. This may be the catalyst for job creation and unprecedented economic age for Nigeria.
“I see that if this government and the succeeding ones remain faithful to this policy, it will get to a level that the auto companies can actually manufacture completely knocked down (CKD) units and this is where the unbeatable success in employment generation lies,” he said.
Involvement of commercial banks
In a bid to facilitate the acquisition of these locally assembled vehicles, some commercial banks have designed typical products to ease their acquisition. Consequently, Stallion Motors, Audi and Hyundai have partnered such banks as Diamond Bank and Skye Bank to create products target at prospective car owners to ease acquisition of Hyundai and Nissan cars made or assembled in Nigeria.

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