Some nine months ago, the Federal Government announced the launch (or is it re-launch) of an industrial revolution strategy or master plan. This has understandably received mixed reviews. What I am putting forward here, I must confess, is but a feeble effort to highlight just a few of the very many issues concerning industrialisation about which there is currently so much disinformation. So much needs to be done – conceptualising, comparing and contrasting, copying, modifying and implementing. No newspaper article or contribution to a scholarly journal, not even a book, can cover all that. But try we must. We owe that much to our grandchildren.
The editorial by a prominent national daily in its issue of Thursday, Feb 27, 2014 is representative of the range of opinions and expectations of all Nigerians, expressed forcefully on this issue through the media. I have chosen to refer extensively to this editorial in making my not-so-humble contribution.
The automobile industry
The following excerpt from the editorial does NOT represent the truth: “There are no made-in-Nigeria vehicles; only a few assemblers of completely knocked down components are available!”
The above statement indicates a clear lack of understanding of the nature and structure of the global automobile sector in this day and age, in contrast with the early days of Henry Ford, and others over a century ago. Today, most automakers make as little input into their models as they can possibly get away with while striving to retain whatever distinctiveness that survives by the time the vehicle gets to the showroom. That way, they keep down long-term capital costs.
For more than a quarter century now, the average mid-size car or van looks exactly alike from 50 metres away. The reason is that everybody uses more or less the same design software and experimental data. In short, sooner or later everyone gets the same answer by hook or by crook! For example, the relationships between vehicle shape and drag coefficients are essentially natural laws. Any deviation from the optimal shape, the wedge, is punished by unacceptable loss in fuel efficiency. Hence everyone toes the line and all cars look alike! The variations in grill aesthetics do not count for much. Moreover, there are a multitude of independent auto design studios nowadays ready to develop new concepts or optimise old ones for both new and aspiring automakers.
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The world of engine and gearbox developers is still growing as we speak. Hence even major automakers are ever willing to source items as critical as the engine from the minors so long as it makes engineering and economic sense. At one point General Motors was filling a few of the vast array of its engine requirements from virtual unknowns from Brazil. Similarly, over a decade ago, the UK group Rover gave up some of its engine development programme altogether and filled the gap with engines by Kia of Korea. It has thus come to the point where governments go out of their way to encourage local automakers to domesticate and retain certain capabilities because of the long-term strategic significance, as in military. Russia is a case in point. So is Turkey on the other side of the great divide.
It should be pointed out at this stage that since most major and minor automakers source their inputs from the same vast pool of component manufacturers and makers of sub-assemblies, it is only the efficiency of the often wide-flung auto assembly operations, local labour laws and cost of labour, together with marketing and pricing savvy, that separate the winners from the also-ran. Therefore, anyone who sneers at the auto assembly process as “just assembly” obviously does not know what he or she is talking about.
Nigerians not convinced, government should try harder
I have observed that a whole lot of sneering is going on here right now, especially by people who have never MADE anything of value in their lives. I was shocked when I read two years ago that a delegation from the Nigerian Society of Engineers visited the INNOSON auto plant in Nnewi to, wait for it, confirm if actually the company manufactures cars and other vehicles and NOT JUST ASSEMBLY. For goodness sake, what exactly is Peugeot Automobiles doing in Kaduna? If these engineers don’t get it, how can the man in the street?
It is most unfortunate that the Nigerian public has no faith in this evolving process in the auto industry. As an added illustration, readers are referred to this story “Kia Takes Nigeria-made Vehicles to Motor Show” carried by all major newspapers on Wednesday, November 5, 2014. The comment by one Idoni George in a national daily clearly illustrates the general perception. The public, whom an enhanced automotive policy is meant to serve, is not being carried along.
Idoni George wrote: “Who are these people deceiving? Made-in-Nigeria cars indeed! It’s very unfortunate that even the government can actually be part of the deceptive game against its own people all in the name of politics. The question is, where are the assembly plants located that manufactured these so-called made in Nigeria cars? . . . Since when did completely knocked down vehicles that are only coupled in their warehouse in Volks-Ojo become made-in-Nigeria cars? There cannot be any made-in-Nigeria car, at least not in the next five years, all things being equal.”
Obviously, we still have a big problem on our hands. It is one thing for our policymakers to fail to make adequate effort to move the nation forward, but it is another thing altogether not being able to convince our people that progress is being made even if belatedly. The government just has to find a way to sell its programmes on this score.
One thing for sure, the sheer size of the big automakers gives them an added advantage. They have a leg-up as regards the negotiated purchase price of their inputs and always a place ahead in the queue in matters of procurement.
Oduche Azih
