Coscharis Group is showing confidence in the Nigerian economy, expanding vehicle assembly operations amid economic vicissitudes, Automotive Policy controversies and policy flip-flops that dog the Nigerian environment.
Last Thursday, it sealed a partnership deal with a French automobile giant Groupe Renault, which will see it assemble two variants of Renault products— Logan and Duster—locally in the semi – knocked down form.
“With the official announcement of this partnership, we shall be offering four variants of the Renault brand into the Nigerian market in the first instance. Two of the variants, Logan and Duster, will be assembled locally here in this plant in SKD (Semi – Knocked Down). As time goes on, both the Renault Kwid and Renault Oroch will be added to the Renault line,” Cosmas Maduka, president of Coscharis Group, said at the official announcement of the partnership in Lagos last Thursday.
He said Coscharis Group would not rest on its oars as it plans to introduce other Renault variants into the assembly line.
He explained that it is in an effort to achieve this that the vehicle assembly segment of the group commits huge financial, technical and human resources to the partnership.
“The fact that we have ventured into it headlong underpins the level of confidence and hope we have for the future of the Nigerian automotive industry,” he said
He said this is to underscore the human capital opportunities that stand to be delivered in terms of employment and the multiplier effect on the economic development of the country.
He demanded governmental support in terms of enabling environment through basic infrastructure required to keep the manufacturing process on.
Fabrice Cambolive, chairman, Groupe Renault, said the company offers Nigerian clients unique and original range perfectly adapted to the conditions of use of the country.
“With a population of over 200 million, Nigeria is a strategic African country where Groupe Renault will extend its footprint. The Coscharis Group is a recognised player in car assembly and distribution. Thanks to their expertise and our products adapted to the local needs, we will be able to answer immediately to the customers’ demand in Nigeria,” Cambolive said.
In October 2017, Coscharis Group unveiled a Ford assembly plant with a capacity to churn out 10,000 to 20,000 cars annually.
The plant, which assembles Ford Ranger and other products, has created a number of jobs, triggering growth in the vehicle value chain.
Nigeria’s Automotive Policy began in 2013 with a view to having a large number of vehicles assembly plants.
Thirty-five percent levy and 35 percent duty were imposed on imported vehicles.
Six years on, the dreams of most local assembly plant are yet to be realised as Nigeria imports more ‘accidented’ vehicles today than ever.
Importers of damaged or ‘accidented’ vehicles officially enjoy a rebate of 30 percent. What this has done is to encourage the importation of rickety vehicles which make up 70 percent of imported cars today.
The age of most imported used cars in Nigeria is 15 years, whereas that of Algeria, Angola, Chad, Mauritius and Seychelles is three, according to a research done by PwC.
Also, there is yet no market for new vehicles. Officially, market for cars in the country was just 6,999 in 2017 as against 555,716 in South Africa; 181,001 in Egypt; 168,913 in Morocco, and 94,408 in Algeria.
The National Automotive Design and Development Council (NADDC) has issued licenses to 54 vehicle companies for local assembly. Industry experts estimate the capacity of these firms at 400,000 units per annum.
The National Bureau of Statistics says Nigerians imported 105,189 units of vehicles in 2016 through the ports and raised the number to 181,404 (72.46 percent increase) in 2017. The capacity of 54 licensed asemblers is 410,000 units.
PwC estimates that 410,000 cars were imported into Nigeria in 2014, out of which 74 percent are used. Passenger cars and commercial vehicles lead vehicle sales with a combined share of 61 percent. Corporate purchases account for the largest share of vehicle sales with 34 percent of the market, while individual purchases are a close second with 30 percent of the market.
“If we want to develop a market for 54 companies that have got licenses with 410,000 capacity plants and we import a huge number of used vehicles, how are we going to support vehicles being assembled, since the ones assembled locally will be more expensive?” Bambo Adebowale, chairman, Auto and Allied Sector group of the Lagos Chamber of Commerce (LCCI), asked in a recent interview with BusinessDay.
ODINAKA ANUDU
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