The automotive industry is celebrated across the world as one of the most important industries. In 2017 alone, the world association of car manufacturers, Organisation Internationale des Constructeurs d’Automobiles revealed that about 73.4 million cars and 23.84 million trucks were produced in the world. These vehicles are essential to the global economy and to the wellbeing of the world’s citizens. The average yearly turnover of the world automobile industry for 2017 was more than 2.
The plants included Peugeot Nigeria Limited , Kaduna; Volkswagen Nigeria Limited , Lagos; Anambra Motor manufacturing Company , Enugu; Styer Nigeria LTD, Bauchi; National Truck Manufacturer , Kano; and Leyland Nigeria LTD, Ibadan. Government privatized the firms in 2007. The FG at the time, led by President Goodluck Jonathan, saw the need to design and implement policies, programmes and strategies for an effective, competitive and diversified private sector, which could boost non-oil revenue. The National Automotive Design and Development Council, the implementing body of the policy was formed by Act no.
Commentators from PWC and Delloite had noted that Nigeria was capable of becoming an automotive hub in Africa. The forecasts made on the backdrop of the automotive policy were premised on the economic outlook, Nigeria’s growing population and projected middle class.
While stakeholders were struggling to put a face to the policy, the decline in economic activities, visible in real gross domestic product contraction of – 2.24 per cent in the third quarter of 2016, the huge disparity between the Naira and major currencies and the scarcity of foreign exchange plunged the development of the sector to a record low in 2016. The development drastically affected demand for cars as the purchasing power of Nigerians dropped.
NADCC stated that over N12billion soft loans had been provided to 35 companies in collaboration with the Bank of Industry to revamp activities of vehicle and motorcycle assembly plants, adding that the manufacture of tyres, brake pads, batteries, filters, plastic and rubber parts, paints and the like were also supported.
A Senior Lecturer at the Covenant University, Ota, and automotive communication consultant, Oscar Odiboh, said Nigerian auto assemblers are running glorified manufacturing plants, adding that most of the assembly plants set up in the country lack the standard to compete globally, and could hardly be called assembly plants. Odiboh said, “What we have at the moment are not real assembly plants, they are glorified joineries.
The challenges highlighted by the experts are direct opposites of the objectives set at the inception of the policy. If the 10-year plan were to be properly implemented, most of the assembly plants were expected to have moved to complete knockdown stage where they would add value to the sector by growing local content and increasing employment figures.NIGERIA’S economic outlook has remained bleak after surviving recession and shock from the sharp decline in commodity prices.
“The automotive sector is down. The monetary policy of CBN and the fall in the value of naira have made the price of cars go up by over 200 per cent. The economy is very bad and because of that, consumers have less money to spend,” Maryann Chukwueke, who returned to Germaine Auto Centre Limited as Vice President, said.UNDER the current policy, commercial vehicles would attract 35 per cent duty without a levy while cars are to attract 35 per cent levy charged on the fully built units .