FG Targets Four-year Transition from SKD to CKD for Local Automobile Manufacturers

Dike Onwuamaeze

The federal government has declared its intention to increase the local components of vehicles that are assembled in Nigeria and transition the automotive industry from relying on Semi Knocked Down (SKD) components to Completely Knocked Down (CKD) parts within the next three to four years.

This declaration was made yesterday by the Director General of National Automotive Design and Development Council (NADDC), Mr. Oluwemimo J. Osanipin, during the Lagos Chamber of Commerce and Industry’s (LCCI) 2024 Auto Symposium themed “From Tokunbo to Manufacturing: The Role of Women Breaking Barriers and Driving Growth.”

Osanipin, represented by Higher Technical Officer of NADDC, Mr. Adebolu Obayemi, explained that moving to the CKD stage would increase the local contents of vehicles that are rolled out from Nigerian automotive plants.
He said: “I reaffirm the council’s commitment to move the automotive industry from importing used vehicles to improving local manufacturing of cars for Nigerian roads.

“We are already assembling our own vehicles in Nigeria currently with Semi Knocked Down (SKD) products, which is simply importing the materials in parts and putting them together here in Nigeria.
“We aim to move to Completely Knocked Down (CKD) where we will manufacture the parts locally in Nigeria. But achieving this requires more collaboration with major stakeholders and people that will manufacture the local parts here in Nigeria.
“At the NADDC, our goal is to increase the local components of vehicles that are coming out of the assembly plants. Basically our intention is to move from SKD to CKD within the next three to four years.  

“To achieve CKD in the industry, we need backward integration from component manufacturers in Nigeria because we need a complete ecosystem since no single manufacturer can manufacture all the materials to build a car.”
One of the panelists during the Auto Symposium, the Executive Director of R. T. Briscoe Nigeria Limited, Ms. Adeola Adenike-Adeojo, called on the federal government to push for the passing of the Nigerian Auto Industry Development Plan (NAIDP) into law to boost investors’ confidence in the Nigerian automotive industry.

Adeojo said: “If you have a policy that is not passed into law, that policy is subject to government’s whims and caprices because everything changes when a new government that its focus is not on that direction comes in and private investments get wasted.

“So, the NADDC needs to champion the passage of this plan into law as a starting point and that will ensure that every other thing will begin to fall into place regarding investments in the automotive sector in Nigeria.

“This is a fundamental objective that the NADDC needs to push and champion.

“I am aware that there is a 10-year automotive industrialization plan from 2023. But we need to go beyond that to ensure that that plan is passed into law because it is a game changer for Nigeria.”    

The President of LCCI, Mr. Gabriel Idahosa, in his welcome address, said that the Nigerian automotive sector has undergone remarkable changes, transitioning from the dominance of used vehicle imports, commonly referred to as ‘Tokunbo,’ to a focus on local manufacturing.

This shift, according to Idahosa, was propelled by economic policies to foster industrialisation and reduce import dependence.  

He said that policies such as the NAIDP offered incentives to manufacturers, leading to increased investment in local production facilities by attracting global automotive companies to establish manufacturing plants in Nigeria.  

Idahosa, however, noted the under representation of women in the Nigerian automotive sector.    

He said: “Encouraging young women to pursue careers in science, technology, engineering, and mathematics (STEM) fields can expand the pipeline of female talent into the automotive industry.”  

The keynote speaker at the symposium, the Lagos State Commissioner for Cooperatives, Trade and Investment, Mrs. Folashade Ambrose-Mabedem, said that the state government understands the significance of an inclusive, equitable industry and is dedicated to fostering an environment that supports this vision.  

She said: “Lagos State is committed to initiatives that support women in this industry.    

“Our partnership with CIG Motors, which established an assembly plant in Ogba, represents our resolve to reduce dependence on imported vehicles, create jobs, and offer affordable transportation for Lagosians.

“These strides are setting a new standard for collaboration, innovation, and economic vitality, particular for women engaged in various aspects of production at the plant.”