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January 25, 2014

Let us set the stage for this debate about the cost of the cars to be manufactured in Nigeria, if, and when this Automotive Policy comes to fruition. The piece by PMNews which gave an indicative price, did not mention SUVs. A quote from the article titled, RATIONALE FOR THE NEW NATIONAL AUTOMOTIVE POLICY FRAMEWORK reads as follows: “….In the circumstance, $10,000 or less (approximately N1.5 million or less) unit price for a modest Car is anticipated from this strategic positioning. The policy framework therefore, provides for the adoption of a LOW COST brand by all companies and a credit purchase scheme to enable Nigerians buy new cars and commercial vehicles including agricultural tractors.” – PMNews. So, from what source, are some commentators assuming that it is the SUVs that will cost approximately N1.5 million? Those who use abusive and insultive words on others because their views differ from their must hide their heads in shame.

One thing is obvious; most countries protect their manufacturing sectors in one way or another. So the argument that we should wait forever for the environment to be 100% right before we kick start our economy is untenable. Are we forever going to remain a country of importers of goods and services, which by implication is helping other countries grow and leading to capital flight? The car dealerships have been operating for so many years and as they have not deemed it necessary to think about technological transfer, by establishing assembly and/or manufacturing plants in the country, then the onus is on government to set the rules of engagement.

The PMNews article also indicated, “…..In spite of the daunting investment environment, the membership of Nigerian Automotive Manufacturers Association (NAMA) has swelled recently with new bus and automotive body building companies. All the privatized assembly plants including Volkswagen of Nigeria, now VON Nigeria; NTM, Kano; Steyr Nigeria, Bauchi; Leyland, Ibadan (now Leyland Busan); Anammco, Enugu and Peugeot Automobile of Nigeria (now PAN Nigeria Ltd) are all operational but limping from overwhelming effect of more or less free imports. Their idle capacity and expansion potentials are clear opportunities to fast track production in partnership with global automotive firms if protected. For instance, NISSAN has already announced its partnership with VON Nigeria to assemble budget cars locally at the later’s plant in Badagry, Lagos.” Any Nigerian who truly wants Nigeria to move to the next level, cannot, but agree with the above statement. The Assembly Plants already exist, but are struggling to break-even because of the unrestricted car and bus importations. Those existing plants have the manpower capacity to cope, and with additional training and continuous professional development of the workforce, they will excel in the art of car assemblage or manufacturing.

If the car dealerships in Nigeria have to all die or go burst by the very high import duties (70%), for the Nigerian Automotive sector of our economy to take off, so be it. Something has to give for us to develop. Drastic measures are needed to move our country forward and we cannot wait for the 100% ‘right time’, before we begin. I will end by giving an example of how Tata Group (India) bought over Jaguar and Range Rover in the UK, and have since turned round the fortunes of both companies, leading to massive employment and increased export of both brands round the world. We can do the same in Nigeria, by bringing the manufacturers of the brands of the dealerships to Nigeria, to change the fortunes of the country. I am 100% in support of the automotive policy, as the overall benefits to the Nigerian economy will outweigh the pains to be suffered by the dealerships.

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