Leading automobile manufacturers in the world under the aegis of African Association of Automotive Manufacturers (AAAM), have indicated interests in investing in Nigeria’s automobile industry with the appropriate regulatory, policy and legal frameworks.
The delegation comprising Deloitte, chief executive officers of Volkswagen, BMW, Nissan from South Africa and other stakeholders are in Nigeria to hold discussions with the Presidency, National Assembly and business decision-makers on the country’s automotive development plans.
Thomas Schaefer, chairman and managing director of Volkswagen Group, Africa who gave update on the Road Show held in Abuja, noted that “Volkswagen, BMW, Nissan, including financial institutions, are trying to see how we can develop Africa properly.”
In the bid to actualize the vision, Schaefer stressed the need for government to ensure outright prohibition of importation of second hand used cars into the country, to enable the automobile manufacturing industry to thrive as well as pass relevant legislative frameworks.
According to him, the investors have the capacity to produce about 2 million vehicles annually in Nigerian market, saying “in Nigeria at the moment, it’s not big for various reasons. The total amount of new cars that is being imported is about 10,000 cars, that’s minute. Nigeria is good at least for 6 to 700,000 cars per annum. In South Africa with the developed industry, I personally believe that Nigeria is good for 2 million cars, with good policy and with cooperation between government and the industry, this can be achieved.
“We can put significant investment into Nigeria to build the cars here than import them,” he noted.
According to him, the manufacturing plants are to be constructed in special economic zones and industrial parks, adding that the issue of power challenge will not hinder the take-off of the initiative.
While noting that the investment will be in stages, Schaefer noted that “at the moment nothing is stopping us to bringing these investments into Nigeria. At the moment you cannot compete with cars that are abroad through other channels – used cars. We are not talking about the old cars, we are talking about the young cars zero to three years old that are coming in, that prevents industrialization. If that is taking care of, I will think our normal investment grows all year at 10 million US dollars to 100 million US dollars,” he noted.
On his part, Hussaini Moriki, chairman, House Committee on Industry who spoke exclusively with BusinessDay expressed optimism that the interactive session would bring about huge investment opportunities into the country in a short while.
“As you can see it’s a tripartite meeting with CEOs of various automotive companies, the regulatory agency – the National Automotive Design Development Agency, indeed the national assembly, the Senate and the House of Representatives we have been here with them to interact and see the extent to which how best can we promote investment in the automotive industry in Nigeria and that is the whole essence of this interaction.
“I’m happy to say that yes, the kind of commitment we receive from the CEOs and the commitment of the National Assembly and on the fact that we are going to continue working together with the agency, by God’s grace in the nearest future something tangible will come out of this interaction.
“We will see more investments, we will see more Nigerian cars being manufactured here in Nigeria we will see more assembling drive in respect of automotive, both components and cars.
While responding to the issues of necessary legislative instruments that would aid foreign direct investment into the country, Moriki said: “we are here to look at the extant laws regulating the national automotive design and development council and see what can we do to further facilitate more investment in this area and to further bring out more incentives for prospective investors to come to Nigeria to invest here. Certainly legislation will come, amendments of certain laws will come, repealing of current ones will come of course enactment of new ones will come in order to make sure the industry grow,” Moriki told BusinessDay.
