New Automotive Policy Receives Global Endorsement

The Director-General,  National Automotive Council (NAC),   Aminu Jalal, has disclosed  that the new national automotive policy recently unveiled by the Federal Executive Committee (FEC) has been endorsed by  many global automotive manufacturers, saying  Toyota, Nissan, Renault and General Motors ( GM)  are already making plans to key into the plan by investing in Nigeria.

Nissan actually celebrated its plan for Nigeria as a   “breaking news” at the media preview of the Johannesburg International Motor Show in South Africa penultimate week, saying it would start assembling Sport Utility Vehicles (SUVs) in Nigeria early next year.

And allaying the fears of many Nigerians about the challenges of the new policy , Jalal, who  spoke with journalists in Abuja last week,   said while the plan would review tariffs on imported fully-built vehicles, it has incorporated mitigation measures to reduce any increase in price . 

Maintaining that   importers of fully built new vehicles may have to pay up to 25 percent more on duty, he said   importers could still clear their vehicles at the old rates until February 28, 2014, provided “they can prove that they had opened a letter of credit (LC) for the vehicles before 3rd October 2013.”

The NAC boss, however,  said the new policy would not lead to the banning of the importation of vehicles in Nigeria as being insinuated in some quarters but would focus on promoting investments in affordable made-in Nigeria vehicles that will in future minimise the importation of vehicles.

He said : “Nissan, Toyota and others are now conducting a feasibility study on vehicle assembly in Nigeria, assuming that a comprehensive automotive development plan will be in place. Accordingly, a holistic, comprehensive and long-term automotive development plan was therefore developed and implementation has commenced.

“The elements of the plan, which will ensure competitiveness and increase productivity of the sector are: industrial infrastructure improvements (automotive supplier parks and clusters), skills development, standards, investment promotion, market development and anti-smuggling measures.

“At full capacity, the Nigerian automotive industry has the potential to create 70,000 skilled and semi-skilled jobs along with 210,000 indirect jobs in the SMEs that will supply the assembly plants. 490,000 other jobs will also be created in the raw materials supply industries.”  

Nissan and its West African partner, Stallion Group, recently announced their intention to jointly inaugurate  a vehicle assembly plant in Nigeria.

The announcement which  is in expectation of the final approval by the Federal Government of the new Automobile Industrial Policy, designed to encourage development of the auto industry in Nigeria, and would see Nissan become the first major international manufacturer to launch vehicle assembly in the country following the new legislation.

The parties have signed a Memorandum of Understanding which will result in Stallion – already Nissan’s exclusive distributor in Nigeria – increasing capacity at its existing plant, VON Automobile Ltd in Lagos.

Stallion currently produces commercial vehicles at the facility. The plant’s annual capacity will be expanded to 45,000 units to assemble a range of cars, light duty trucks, pickups and vans.   However it is anticipated the first product to be introduced will be the iconic Nissan Patrol SUV in spring 2014.

Capacity at the plant will also be opened to Nissan’s Alliance partner Renault, to be utilised according to future business needs. Nissan President and CEO Carlos Ghosn said on the development : “We welcome the proactive measures being taken by the Government of Nigeria to encourage inward investment and job creation driven by local auto manufacturing. Together with our local partner, Nissan is preparing to make Nigeria a significant manufacturing hub in Africa. As the first-mover in Nigeria, we are positioned for the long-term growth of this market and across the broader continent.”

  Chairman of Stallion Group, Sunil Vaswani, also  said: “The new automotive policy spearheaded by His Excellency The President and Commander–in-Chief of Armed Forces of the Federal Republic of Nigeria Dr Goodluck Jonathan and the Honorable Minister Olusegun Aganga is a laudable Government initiative aimed at making Nigeria the regional leader in the industry. Our group is committed to invest in a fully integrated automobile industry that fosters the creation of several ancillary industries with associated socio-economic benefits.” He added: “We value our partnership with Renault and Nissan immensely and are aiming to deliver their world class expertise to Nigeria.”

Announcing the policy that is expected to  position   the country for a place in the league of auto-producing countries, the  Minister of Industry, Trade and Investment, Olusegun Aganga,  had  said at a press briefing in Abuja that with the new measures, the automotive industry would create significant, good quality employment and a wide range of technologically advanced manufacturing opportunities, among others.

  “In many countries around the world, the automotive industry plays both strategic and catalytic roles in economic development, particularly in employment creation and wealth generation; small and medium enterprises development (as it relates to auto parts components and services); skills development and technology acquisition.”

“An automotive industry will create significant, good quality employment and a wide range of technologically advanced manufacturing opportunities. This industrial base can then form the foundation for other modern advanced manufacturing activities. For example, commercial vehicle production will lead to the manufacture of agricultural, mining and railway equipment, military hardware and transport.” he said.

Source: Thisday