The current scramble in India between established leaders like Suzuki-Maruti and others which include outsiders like big Toyota shows that with strategic planning most players can get a foot in the door. It should be no different for Nigeria.
The Japanese ambassador offers his advice
The editorial continues, “Japan’s ambassador to Nigeria recently reminded us that it could take up to 10 years to build up a truly viable local auto industry. . .”
So? The tragedy is that nobody here has challenged or tried to qualify that assertion. What a pity! When do we start counting? 1972, 1975, 1985, or is it 2005? It has been 10 years many times over. We simply got distracted and missed our way on the journey. Nigeria needs to retrace its steps and go back, even if belatedly, to the fundamentals that have been known to work in other climes.
Carrot and stick
No major automobile manufacturer will step in to assemble (yes, assemble) cars in a relatively small-to-medium sized market like Nigeria unless there is a clear incentive to do so. The other side of the coin is that no major manufacturer will willingly freeze itself out of the Nigerian market if the policy is consistently and unapologetically lopsided in favour of locally-manufactured vehicles. The “Buy Local” policy that is routinely announced by our government and as quickly forgotten is not supposed to represent a PR posture, but a matter of economic life and death.
The Brazilian experience
I will refer our policymakers at Abuja and any interested reader to the early Brazilian experience as reported in The Harvard Business School Bulletin of June 1994.
In a story written by Gary Emmons, researcher Helen Shapiro (PhD Economics, Yale; then an assistant professor at HBS) details how Brazilian policymakers in the late 1950s up to the 60s “in effect created an automobile industry – relying predominantly on foreign capital – by successfully wooing and CAJOLING foreign automakers to set up factories there. While the state indeed closed its domestic market to competitors, the market’s relatively small size was a modest inducement – the only real payoff for the transnationals would come sometime in a nebulous future, with heightened access to an expanded population and market and whatever other rewards might derive from the firms’ status as early entrants.” As it turned out, that future came sooner rather than later.
It would be an interesting exercise to track Nigeria’s demographics, especially the growth of the middle class these past 50 years. The Brazilian template and others have always been available to be copied. There is every indication that the Brazilian model would have fit Nigeria with very minor panel-beating. If I could ferret out this body of information, so also could others for whom such activity defines their job description. That is unless they were or are still sleeping on duty!
READ ALSO: Nigeria set to overcome insecurity, piracy on its waters
I had actually made full colour copies of the article cited above just about the time former President Obasanjo came into office in 2001. The idea was to draw the new government’s attention to the renewed possibilities in the auto industry. However, in a very short while I concluded, based on subsequent pronouncements, body language and actions, that the government of the day was clueless and essentially impervious to the kind of external influence ordinary folks like me could reasonably exert. Readers will have noticed quite early that my name does not exactly ring a bell. Hence I threw in the towel then. You can term this essay my Second Missionary Journey!
I hate to imagine that I, of all people, would be teaching anything to the proud Asiodus, Ciromas, Allison Ayidas, Ahmed Jodas, Muhammadu Buharis and Ibrahim Babangidas, etc of this world. But let the truth be told, they missed the road with us in tow. We all got lost with them.
Among the class of the so-called super perm-secs, nobody, for example, lost his job for opposing the cancellation of the Lagos Metroline. A book on Catholic religious doctrine states that excessive obsession with one’s personal survival in an environment where principled opposition is the right thing to do (with an attendant cost; even one’s life) is actually sinful. With everyone playing safe, is it then any wonder that we are where we are? Can we find our way back to the right path?
It is on record that during the watch of these gentlemen and others, we were importing the many variants of Volkswagen, the Beetle then discontinued in Europe and the Igala fastback from Brazil. As bus and coach builders – Marcopolo, Vanhool, Autobus, Jimbuss, etc – trooped down to set up shop in Brazil, the Nigerian people and government followed suit but with order book and cheque book in hand. How we love to shop!
I like to talk of specifics. In the early 1980s I was pained and dismayed when our military (read government) took delivery of Land Rovers from their factory in Spain, and operational trucks from Tata in India while ignoring our very own MB-ANAMCO in Enugu, Leyland in Ibadan and Steyr in Bauchi, not to mention the Fiat plant in Kano. In India the Maruti 800 was launched in 1983, two years after the Suziki-Maruti joint venture was incorporated in 1981. Please note the date. Two years later the Maruti Gypsy was launched and soon became the primary operational vehicle of the Indian military and police. The success of their top-line model, the Grand Vitara, which features prominently on Nigerian roads, is an established fact.
It does not take the mathematics of late Prof Chike Obi or a Nobel laureate in economics to deduce the likely impact of a policy whereby the Federal Government of Nigeria and the various state governments (the largest purchasing bloc) bought all cars from the then Volkwagen of Nigeria or Peugeot Automobile of Nigeria. Toyota, Honda and a host of other Japanese and Korean newcomers would not have had to be wooed. They would have come on their own.
The economic spin-offs and other add-on effects derivable from a vibrant automobile manufacturing industry go without saying. The Toyota and Honda operations in Thailand were probably set up years after the five vehicle assembly plants in Nigeria went comatose or, more correctly, killed very dead by our very own hands. In effect, what we are talking about now is certainly not revival but an actual resurrection from the dead of the Nigerian automobile industry, almost 45 years after the major plants were set up. Right now Nigeria imports from just about any other source without any sense of shame. I will not be surprised to see a shipment coming in soon from North Korea. So much for our on-again, off-again automotive policy!
In subsequent writing, I will address the railways and other aspects of heavy-lift transportation.
Oduche Azih
