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Over 20 Auto Plants Close Operations in Nigeria, as Six others Operate under a Precarious Situation

More than 20 of the 28 automobile assembly plants, which started operation in Nigeria from 2014, have closed down, leaving only six, which are running under a precarious condition.

The Deputy Managing Director of CFAO, Mr. Kunle Jaiyesimi, who made the confirmation in his presentation at the 7th edition of the Nigeria Auto Journalists’ training/capacity building workshop held on Friday in Lagos, attributed the unfortunate development to policy inconsistency on the part of the Nigerian government.

He recalled that in the 1970s and 1980s, Nigerian government partnership and patronage with five Auto Assembling Companies contributed immensely to the economic development of Nigeria and the non-oil revenue of the Federal Government.

He added that the economic downturn that followed encouraged massive importation of used and new vehicles, leaving the very few Assemblers in existence struggling for survival with no incentive scheme or policy to protect and guide them.  

“This worries,” he pointed out, “birthed the National Automotive Industry Development Plan (NAIDP) in 2014. The objective of the Auto Policy is to discourage the importation of Fully Built vehicles into the country, encourage local Assemblers to maximize their potentials, generate employment, boost skills and manpower,  instill research development, increase the nation’s GDP and make Nigeria an automotive hub in West Africa and Africa in general.  

“According to the  National Automotive Design and Development Council (NADDC), 28 companies are currently assembling in Nigeria out of the 54 that registered for assembling, and out of the 408,870 units capacity per annum, only  8,473  (2%) have so far been achieved. “

However, according to Jaiyesimi, the journey towards auto industrial revolution started in 2014 suffered a serious setback, no thanks to failure of the past and incumbent president of Nigeria to sign the Nigeria automobile Industry Development Plan (NAIDP) Bill into law, worsened by Lack of incentive to those that invested billions in the automobile assembly project, Non provision of forex by the CBN for settlement of our Letters of Credit.

CFAO DMD, Jaiyesimi: “With the way things are going, it will come to a point whereby Ghana would start exporting its locally produced vehicles to Nigeria. That will be the end of the Nigeria Auto industry”

Others, in Jaiyesimi’s lists include : “Non-availability of vehicle finance scheme, despite the collection of over N180 billion levies on Fully Built vehicles by the Nigeria Customs Service on behalf of the NADDC/ FG, Frequent upgrade of imported vehicles (SKD/ CKD) values by the Nigeria Customs Service, Delay in vehicles/ containers clearing process as a result of bottlenecks at the Ports due to activities of various Government agencies at the Port and reduction of duty payable for non-assemblers and used vehicle importers.”

Kunle Jaiyesimi, who is also the chairman of the Auto & Allied sub-Sectoral group of the Lagos Chamber of Commerce & Industry, (LCCI) revealed  that his company, CFAO is not isolated from the misery that the local automotive industry is passing through, but has decided not to lay off their workers. 

“To keep the employees,” he disclosed, “we converted our auto assembly plant in Ijora to aftersales facility, a move aimed at keeping our employees working. 

He recalled that, when the National Automotive Design and Development Council (NADDC) came up with the policy, it was meant to go through three phases of SKD1, SKD2 and CKD. “The first two phases should have been completed within five years, that is 2018, and migrate to CKD (Completely Knock Down)

He lamented, “By 2018, we should have migrated to CKD, but we are still in SKD1 in 2022. Can we even talk of manufacturing tyres today? Tyre manufacturers in Nigeria have migrated to Ghana and I don’t blame them. It is unthinkable that after many years, no headway has been made. Ghana took our auto policy which we gave them and they worked on it.”

“Today auto giants like to invest in Ghana instead of Nigeria, because of the business friendly environment there. These foreign firms get information from local operators.

“With the way things are going, it will come to a point whereby Ghana would start exporting its locally produced vehicles to Nigeria. That will be the end of the Nigeria Auto industry.” 

Stressing that the auto industry is very symbolic in a lot of countries, he challenged the media to do more in making case for the nation’s auto industry development in their reporting.

 He also urged automotive journalists to do an independent investigation into the workings of assembly plants in the country, so that they can come up with an ascertained report about what is happening in that area. 

This year’s training programmes was sponsored by Weststar Associates, franchisee of Mercedes-Benz brand, Stallion Motors(Franchisee of Nissan, Hyundai, Porsche, MG, Changan and Audi brands) Toyota Nigeria Limited and CFAO Motors (franchise owners of Mitsubishi and Suzuki brands in the country). 

Key facilitators at this year’s training programme included Kunle Jaiyesimi, Deputy Managing Director of CFAO group, Dr. Oscar O. Odiboh, a lecturer at the mass communication department of the Covenant University, Ota, Ogun state and Kunle Bamidele, chief technology officer, Pro-ICE Ltd. 

The training event was well attended by stakeholders including the FRSC, NADDC, Weststar Associates, Stallion Motors, CFAO amongst others. 

NAJA is the umbrella body of Nigeria’s motoring journalists which cuts across the print and online publications. The training workshop is an annual training programme, organized to refresh the minds of practicing auto journalists on the trend of auto journalism worldwide.

CFAO DMD, Jaiyesimi: “With the way things are going, it will come to a point whereby Ghana would start exporting its locally produced vehicles to Nigeria. That will be the end of the Nigeria Auto industry”

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