‘Forex scarcity could open investment doors into 250,000 capacity automotive market’

Aminu Jalal,the general of National Automotive Design and Development Council,(NADDC) said the present forex constraints presently experienced due largely to importation of goods from outside the country  has the capacity to  open investment opportunities for the automotive sector.
This, he attributed to the capacity of the automotive policy in driving local content promotion,creating jobs along the automotive parts  value chain while addressing massive importation of cars which is the bane of the country,as a result of the dwindling revenue base.

Jala while speaking to the Media on Tuesday in Abuja said,”The economic recession is affecting various aspects of the economy. But this is even the right time to fast-track the economic diversification with particular attention to the automotive policy because of the numerous opportunities along the value chain”

There comes a time when we will not have the dollars to import and we must pay attention to the automotive policy which has been designed to spike investment in local content manufacturing and create jobs along the various  value chain in the automotive sector”, Jalal said.

This is even the time to make sure that the policy succeeds because the value additions in our vehicles will gain more tract due largely to the local content of the policy”, Jalal said.

According to the director general, “we  are working so hard on the policy so that the demand on the Foreign exchange would lessen. Already, Innoson is selling his vehicles in Ghana and other African countries and his auto parts are  even sold to the neighbouring countries. This is what we are talking about because the money is coming back here. This is one of the focus of the automotive policy.”

While speaking further on the advantages in the value additions in the sector, he said; ” There are lots of advantages such as the increase in value addition. The value added now  for cars is  20 percent; for Mass Transit Buses,it is over 40 percent. Because they bring in the engine and the chasis. Whereas the other key parts such as the sheets,the products they use,they get locally.”

Explaining further the capacity of the automotive sector to drive economic growth, Jalal said, “World wide vehicles are very expensive items as you know, and world wide, a car is second most expensive item after house. Once there is recession, it affects the sales of vehicles because of weak spending. In 2008,when there was recession in America,it affected the automotive industry, the government has to intervene to ensure the vehicle companies stay afloat so that they don’t go bankrupt.”

Clarifying further on the contribution of the auto sector to the GDP,he said,”For every one person growth in the GDP,demand for the automotive sector grows about 2 percent. As the economy improves, everybody has personal mobility and the companies and businesses need vehicles.”

While highlighting industrial parks located in the states, he said:The Industrial Parks are in three Zones,Lagos-Ibadan,Kano-Kaduna,and Enugu Anambra. We are putting one in each place,and we have one in Osogbo,we have one in Nnewi,we have the one in Kaduna.

On the Automotive Development Fund, Jala said,”In collaboration with the Bank of Industry, we have disbursed N13 billion and N7 billion had been repaid already by the automotive industries that had accessed such funds. Currently, we have application of N8 billion still pending, and we are working collaboratively with the Bank of Industry for further disbursement to those who qualify.

”So far about 10 auto companies are demanding about N8 billion”, he explained.