Potentials of Nigeria’s MotorVehicle Production Industry

Bennett  Oghifo

Nigeria has great potential of becoming a frontline vehicle manufacturing country because the few indegenous companies that have dared to take that path have produced exceptional vehicles. 

In addition to this is the emergence of very resourceful ancilliary companies that are producing motor vehicle parts. These are expected to feed the automotive industry. 

Nigeria’s auto manufacturing industry has come a long way since the 1950s with the production of passenger cars and commercial trucks. Early production was led by the assembly line of Bedford TJ trucks made by United Africa Company’s (UAC) subsidiary, Federated Motors Industries and SCOA’s production of Peugeot 404 pickup trucks. Significant development began in the 1970s, during a period of oil boom, the Federal Government of Nigeria signed joint venture partnerships with foreign car manufacturers to assemble vehicles and provide technical assistance towards vertical integration within the local industry.

These foreign brands went on to dominate the industry from the middle of the 1970s to the end of the 1980s. The passenger vehicles brands were Peugeot Nigeria Ltd and Volkswagen. The commercial vehicles manufacturers, Leyland, Anambra Motor Manufacturing, and Steyr competed with Bedford trucks for dominance. The companies simply assembled kits and completely knocked down parts imported from abroad. In the marketplace, demand was largely dictated by the government’s budgetary concerns. Towards the end of the 1980s the industry was negatively affected by a downturn in the economy, government’s inconsistency and the higher cost of locally manufactured cars compared to imported counterparts. By 2000, used foreign cars dominated car sales in the country, and the rise of these affordable used cars negatively impacted the development of backward integration in the industry. 

Some of the plants had been privatised, VON was sold to Stallion Group and Leyland was sold to Busan. Production has been scaled down from the heights of the 1980s

There is an improvement in recent years with truly indigenous companies working hard to create value and grow the mobility sector. For instance, Innoson Vehicle Manufacturing (IVM), opened an assembly plant, churning out excellent vehicles. 

Innoson Vehicle Manufacturing product line includes heavy duty vehicles, middle and high level buses, special environment friendly vehicles. The company carries out optimisation design and assembly according to African road conditions so as to produce suitable products at affordable prices, according to the company.

Another one of such indigenous future-oriented companies is Jet Motors Company, with its range of combustion and electric-powered vehicles. This uniquely built set of automobiles that will change the experience of African automobile users has been in the works. JET Motor Company (JET Systems), a Nigerian auto manufacturing company has been working on vehicles with optimum specifications for the Nigerian and African environment.

After about three years of research, testing and iterative development, some of the earliest outputs of the company’s effort are the JET EV, Africa’s first all-electric vehicle, and the JET Mover, a luxury, durable, yet affordable minibus built specifically for African roads.

Speaking to some of the challenges faced by indigenous entrepreneurs in the auto assembly industry, the Chief Executive Officer (CEO) of Jet Motors Company, Mr Wemimo Osanipin, called on the Nigerian government to be deliberate about supporting local players in the sector.

He said, among others, “The government must appreciate that there are just one or two brands truly indigenous to Nigeria. These players, in spite of the country’s everyday challenges, are striving to create value and grow the economy.

“The government must be deliberate in encouraging local industries by ensuring that the policy of patronizing indigenous assemblers is fully implemented. This way, Nigeria can limit the volume of capital flight currently leaving the country.”

As things stand, the government needs to truly support indigenous auto manufacturers, especially those positioning for the future, such as Jet Motors Company, Innoson Motors and others through patronage and policies that would create investor confidence for the consolidation of the auto industry, particularly because of its economic multiplier effect. 

Meanwhile, the Director-General, National Automotive Design and Development Council, Mr Jelani Aliyu, has said recently that the Automotive Industry Development Bill, which was passed by the eighth National Assembly, is awaiting the assent of President Muhammadu Buhari.

The development is coming about two years after the council’s confirmation of its approval of 45 companies that signified interests in building vehicle assembly plants in Nigeria, following the Federal Government’s introduction of an auto policy meant to discourage importation of fully built vehicles.