Despite challenges, Honda Automobile Western Africa Nigeria Forges on at 44 Years

Despite economic downturn as it affects manufacturing in the country, Honda Automobile Western Africa Ltd forges on after 10 years of operation in Nigeria and 8 years of SKD assembly, while the motorcycle arm continued the same since 1979 the factory was commissioned.

Although its production output has come down from its installed capacity of 1,000 units of vehicles per annum, the auto firm maintains that it will continue to uphold its quality standard which it has been known for since its establishment in Nigeria 44 years ago.

Speaking during a media tour of its factory in Ota, Ogun state, Managing Director, HAWA, Takashi Nakajima, said among other operational difficulties, the company is currently experiencing challenges of foreign exchange and also the scarcity of dollars for purchase of goods and components for manufacturing.

According to him, the uncertainty of the auto policy is also a challenge, which is now under discussion, adding that the direction of the policy is not stable yet.

Nakajima said as an Original Equipment Manufacturer (OEM), it needs some stimulation from government for the market to increase.

For instance, he said: “90 per cent of the market is used cars. If we have some regulations around new cars, it will help to build confidence of our business.”

The company has an installed capacity of 1000 per year, which can be doubled if there are more patronage from customers and government.

“We have an installed capacity of 1000 per year and daily capacity to assemble 3 units per day. For now we are doing 50 per cent of the three units, that is, we do 1.5 units per day because of low sales and some other challenges”.

The Honda managing director said based on data gathered by individual efforts, the company has 10 per cent market share of the industry.

He said the company is currently lacking patronage from the government which is an enabler of products produced locally. “We are ready to supply the government. As the only OEM in Nigeria and only assembler in Ogun state, we expect some patronage from the state government though they have not shut their doors. Our sales have been more, to the Corporates”.

“There is something about popularity acceptance. Government as enabler determines what citizens will do, which trickles down to what consumers buy.  As an OEM, our quality is guaranteed and our relationship with every customer is the same.”

Speaking on the level of local professionals working in the factory, Remi Adams, head, sales marketing and logistics at HAWA said the ratio is 99 per cent Nigerians to one foreigner. “You will see Nigerians everywhere. Once the experts are here to transfer technology they go back.”
He said that the company tried to source material locally but most of the materials are not up to quality.

“As Honda, we can say the major action that the federal government needs now is a hire purchase scheme with single digit interest rate. This was the promise made by the government before we set up assembly operations, all we ask for now is for the government to fulfill its promise.”

On expansion into gas-powered and electric-powered vehicles, he said: “In Nigeria, the said HAWA is not yet considering electric vehicles because the standards and infrastructure are not in place with the technical know-how.”

HAWA is rather focused on quality and standards of product worldwide despite the difficult business environment.

“Since 2015, we have not closed down our factory maybe as a result of low sales or other issues, instead we reduce the volume we role out on daily basis. There is always production, the week where production is low; there will be technical training for our staff for such a week or period.  For Honda, we believe in starting strong and growing with it.”