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FG Targets 40% Local Content Development for Auto Industry

By: ROTIMI ASHER (with Agency report)

The National Automotive Design and Development Council (NADDC) is targeting 40 per cent local content development in the automotive sector within the next five years.

The Director General of the council, Mr Aminu Jalal, disclosed this last, when fielding questions from newsmen in Abuja.

According to Jalal, NADDC’s emphaisis has shifted to the second phase of the federal government’s automotive policy, which is local content development.

“The auto policy,” he explained, “has two major objectives: to bring back automotive assembly operations and to develop local content. We have achieved the first objective.

“Emphasis has now shifted to local content development aimed at developing the local capacity to produce automotive components needed by assembly plants, using available local human and material resources.

“Assembly operations alone account for about 15 to 20 per cent of the cost of the vehicle. When you add local content you now increase the value added.

f3-VvbGd“We are hoping that within the next five years, we will reach value addition of about 30 to 40 per cent,’’ he said.

Jalal said that five South African companies had indicated interest in establishing component manufacturing plants in the country.

He added that some potential Chinese investors had also indicated interest and were already exploring opportunities in that area.

“Local content development in the automotive sector comes with huge requirements both on the part of the suppliers and the assembly plants,” the NADDC boss pointed out. “The suppliers require the local assembly plants to attain certain production level that is enough to support their business before they will come in.

“The assembly plants, on their part, want component supply at competitive cost, in required quality and quantity, and at the required delivery times.

“The component suppliers also need to be able to upgrade their products to keep up with the pace in the industry which you know is very fast.”

He said that the council was undertaking a “benchmarking study’’ to identify the gap between demand and supply of components in the industry.

The aim of the study, he said, was to gather adequate information that would enable suppliers to meet the demands of the assembly plants.

 

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