TWIN CAR POLICY CAN LAUNCH NIGERIA ‘S AUTO REVOLUTION

TWIN CAR POLICY CAN LAUNCH NIGERIA ‘S AUTO REVOLUTION

BY ABDULMUMINI ADEKU

 ASSEMBLAGE OF PEUGEOT IN KADUNA,NIGERIA

……………………PROBLEMS GALORE IN AUTO-INDUSTRY IN NIGERIA

……………………. BAD FOREIGN EXCHANGE REGIME AFFECTS PLAYERS

……………………SMUGGLING ON THE RISE, KILLS BUSINESSES

……………………. MANY AUTO SHOPS CLOSE DOWN IN LAGOS, NIGERIA

………………………MAN SPEAKS ON UNCLE’S CHEQURED PEUGEOT CAREER

………………………..PEUGEOT ASSEMBLED 25 VEHICLES DAILY UNLIKE A VEHICLE NOW AT THE HEIGHT OF BOOM IN THE 80s

………………………PROBLEMS CITED IN CLEARING AND FORWARDING

………………………POWER ALSO LISTED AS A PROBLEM

………………………OPERATORS SAY NIGERIA CAN PRODUCE ITS OWN CAR

The Nigerian automobile sector may be losing a colossal amount of money due to its inability to get its automobile policy right due largely to the activities of saboteurs rather than a well thought out solution as an investigation is currently underway by The News Office Desk of Paedia Express Multimedia in Lagos, Nigeria

In a fact file on the portal of the National Automotive Design Council ,It was noted that the National automotive policy was re-launched in 2013 and a definite plan for implementation, NAIDP, was announced with very clear fiscal guidelines and programs to run, initially for 10 years with periodic properly phased reviews.
Its main objective is to bring back vehicle assembly operations and develop local content, thereby making Nigeria a vehicle manufacturing nation.
ECOWAS Ministers of Industry have adopted the automotive industry as one of its four priority industrial development areas. The others are agro-processing, pharmaceuticals and construction. The ECOWAS Commissioner for Industry is now developing a strategy for the development of the automotive industry in West Africa.
The planned  objective is to have vehicle assembly operations with increasing local content incorporation. This may be achieved in the assembly stages below. The transition from one stage to another should not exceed 12 months. (i.e. a maximum of 36 months from start of SKD 2 to CKD operations (including 12 months set-up period)):
The response to the policy so far has exceeded our expectations. The current status of implementation of the policy is that the 14 existing assembly plants like VON, PAN, Innoson, Anammco and Leyland-Busan have started assembling new products in 2014, and new ones were established, assembling the following:
• Nissan, IVM, Peugeot, Hyundai, Honda, Kia, VW, Ford, Changan, GAC, Cars, SUV and light commercial vehicles;
• Hyundai, IVM, Nissan and Ashok-Leyland buses;
• MAN, IVM, Sino, Shacman, MAN, FAW, Aston, Foton Forland and Isuzu Trucks; and
• Proforce armoured vehicles.
The total installed capacity is over 300,000 units per annum.
Our emphasis has now shifted to the development of automotive local content.
Nigeria has the market to sustain an automotive industry, a potential of one million vehicles annually with ECOWAS and Central African countries as additional market,.
The Nigerian automotive industry development plan is our best chance of developing this vital industry. The response by investors in vehicle assembly has so far exceeded our expectations. We are now concentrating our efforts in local content development.
The industry is long-term in nature and requires policy continuity and consistency. This is already assured as the new government has decided to continue with the policy. Nigeria is therefore on track to becoming a vehicle manufacturing nation.
However as at press time, checks by this reporter shows that the aforementioned optimism by the government regulatory body does not in any way correlate with the situations on the ground.

Insiders insists that  the foreign exchange crisis will not go away so soon immediately Nigeria viz-a-viz the prices in the nation’s economy due to the dire situation in the oil and gas sector was  causing a serious ripples around the sub –region.

A lady who introduced herself to this reporter as the Special Assistant to The Chief Executive Officer of Cyan Motors   at 45 ,Toyin Street in Ikeja,Lagos,Nigeria but who will not give her names  said that the problems associated with smuggling was also affecting all the sector players seriously .

 A Source speaks: “My uncle worked for Peugeot Nigeria Limited for 26 years and retired in 2006,he has presented seminar papers on automobile engineering for the nation at the highest level and is now even very frustrated as he thinks that they are not serious at all “

“When my uncle was in Peugeot ,they had three daily shifts and that is about eight hours each  and at the time in history Peugeot produced 25 cars and had thousands of workers  but I can tell you that as of today they only produce a car in a day and it is not even every day as there are days unending that the do not produce at all”

“Though I heard recently that they just came out with a new brand ,at the time we were talking of the glory of the brand it was a great boom in the industry as you know that the automobile sector’s growth is the direct indicator and symbol of any nation’s industrialization aside from it being the heaviest employer of labor but the reverse is the case right now  “

In a related issue,Mr Israel Fredrick ,a Manager of DeboscoMotors  harped on the need for the nation to take the issue of its power very seriously as this was impacting negatively on the sector.

In his opinion if this was sorted out he  was sure that the nation can sustain is auto assembly plants and even go into a new automobile age by going full throttle into real production.

In his own contributions, Comrade  Adekunle Adewunmi ,the Chairman of Nigerian Automobile Technician   said the entire scenario going on as far as all the illegality in the automobile sector was concerned was that the rot was in full collusion of government agents and blamed it on sabotage.

He affirmed that if the Federal Government come up with a policy such that two major car companies are invited into the land  and have a bilateral pact with the nation then it was possible to kick out corruption and have a sustainable working blueprint on the sector.

He assured that if Nigeria is consistent with the two auto companies that were invited for a pact he was sure that the allied parts of the sector can produce for the plants for like say 10 to 15 years and later on the gains from that can be ploughed into real production as well.

His words:”I can use Toyota to couple Volkswagon vehicle and that can serve Nigerians so in essence if the enabling environment exists we can produce our vehicles”

The Former Chairman of the body,Engineer Eleshinloye Oloruntele  said that if the nation had being holding on to just two vehicle brand policy he was sure that the nation will have being producing its own cars by now.

He insisted that smuggling is on the increase because of the unstable nature of the nation’s economy.

federal government has banned the importation of vehicles through the nation's land borders. The prohibition that was announced in early December to come into effect on January 1st is an attempt by the authorities to curb large-scale smuggling of cars into Africa's largest economy to encourage local automobile assembling companies as well as protect government customs revenue. However, it comes with a number of downsides, not least having the opposite effect on smuggling than intended. Meanwhile, the local automotive sector had been showing some promise, but has been severely affected by wider economic challenges that import bans will do very little to remedy.

The Nigeria Customs Service (NCS) hopes the overland import ban will prevent the use of seaports in neighboring countries, especially Benin, to transport vehicles destined for West Africa's giant nation. The NCS says that despite Nigeria having bigger and better-equipped port facilities, importers prefer to send their cargoes to neighboring ports and then smuggle the vehicles through porous land borders or by bribing officials at border entry points to avoid paying duties. Many consumers also travel from Nigeria to neighboring countries, especially Benin, Togo and Cameroon, to buy cars from local dealers who are making brisk business catering to Nigerian customers who drive their purchases home through official and unofficial routes.

The recent increase in vehicle smuggling into Nigeria followed the July 2014 increase in import duties on vehicles from 20% to 70% (including a 35% levy) for new cars and to 35% for used cars as part of a five-year Nigerian Automotive Industry Development Plan (NAIDP) introduced in 2013 to revive the country's vehicle and auto-parts industries. Under the new policy, local assemblers are allowed to import new vehicles at 35% duty, to a volume proportionate to their output, as an incentive to investors.

The policy of tying imports to local production has been quite successful in increasing the number of automakers in the country. Foreign brands that have set up production lines, in partnership with local firms, include Ford, Toyota, Nissan, Hyundai and Kia. Existing plants, such as Peugeot, Volkswagen, and ANAMMCO a Nigerian commercial-vehicle partnership with Daimler have been resuscitated. In January, Dangote Group of Companies, owned by Africa's richest man, Aliko Dangote, announced it was setting up a US$100m truck assembly plant in Lagos in partnership with a Chinese firm, National Heavy Duty Truck Group Company (SINOTRUK). The plant will produce 10,000 trucks annually and employ 3,000 workers when fully operational.

According to the National Bureau of Statistics' latest GDP data, motor vehicles and assembly output rose from N11.3bn (US$370.5m) in the third quarter of 2013 (at 2010 constant prices) to N14bn in the third quarter of 2014, but then fell to N8.3bn in the third quarter of 2016. The subsector shrank by 33.3% in July-September and was the worst decline in the manufacturing sector. Even if closing the land borders to imports works—which we do not think it will—it would still only have a limited impact on a sector dealing with much wider economic constraints. Given that we expect the government to struggle to counteract such constraints, the prospects for the automotive sector—along with the rest of the economy—are weak.