Nigerian Auto and Allied Sectors in 2017: The Tears…The Cheers

Nigerian motorists ended the year 2017 with pains inflicted by the handlers of fuel supply in the country. NAIDB, which successfully passed the the National Assembly failed to receive presidential assent till the end of the year. Notwithstanding  the nation’s auto sector, which though sailed through most part of the year in a stormy weather, ended it with flickers of optimism, writes FEMI OWOEYE

For most part of the just concluded year, the Nigerian auto and allied sectors operated in a state of hopelessness. It was not until about the third quarter of the year that some ray of hope flickered in.

The Tears

The operation turbulence that bedeviled the Nigerian auto industry in 2016 endured through the second quarter of the year 2017. It was almost total quietness and darkness. At its quarterly press briefing in May, Toyota Nigeria Limited (TL) told journalists it had decided to focus mainly on after-sales services. New car unveils was rarity.

Persistence of FOREX Scarcity: Contrary to claims by the Central Bank of Nigeria, the nation’s auto assemblers and dealers found it difficult to assess dollars with which to import both Fully Built up (FBU) vehicles for sale and kits required for knitting together locally assembled vehicles.

Sportage launched by Kia Nigeria in 2017

Dwindling Sales: Aside FOREX scarcity, the nation’s auto sector also suffered from dwindling sales, a situation that most part of the year drove companies’ operations further into stalemate, making local assembly plants more like ghost estates as a result of under-utilization.

It was so tough that many investors in the sector found themselves on the brink of exiting the country or changing their business portfolio.

The Federal government, which was expected to offer necessary support to the fledgling auto sector of the country could not, because it was on its side fighting for the soul of the nation’s economy, which was said to still be recuperating from economic diarrhoea.

2018 Hyundai Sonata: one of the very few auto models launched in Nigeria throughout 2017

Very Few Vehicles Unveiled: In a sector occupied by over 20 stakeholders, there was less than seven new vehicles unveil throughout 2017. Kia Launched Sportage in the second quarter and that was it. PAN Nigeria Limited unveiled the latest generation of the Peugeot 301 sedan called Peugeot 301 Midlife. Hyundai Nigeria launched 2018 Sonata, as the year was winding to an end.  Most significant of them was that of Fiat.

Fiat’s Short Stay: Leading European brand, Fiat, was launched into Nigeria’s automobile market in May 2017, courtesy of Weststar Associates Limited, Nigeria’s official representative of Fiat Chrysler and authorized General Distributor of Mercedes-Benz, Chrysler, Jeep, Dodge and RAM.  Preparation for the launch commenced early in the year. Motoring journalists were informed ahead as early as March.

And the launch came up as planned. The occasion was revolutionary. The company’s managing Director, Mr. Mirko Plath’s presentation was coloured with hope and assurance of success. There was even a hint that the brand would be locally manufactured in near future.

But, a thunderbolt experience it was like in Motoring World’s newsroom, when we received a media statement announcing termination of distributorship agreement between Weststar Associates Limited and FCA effective from Monday, 5th December 2017.

According to Mr. Mirko Plath, Managing Director/CEO, Weststar Associates Limited, the termination was necessitated by its company’s plans to “provide undivided focus to the Mercedes-Benz brand as it embarks on an increased business scale of activities in the coming year (2018)”.

Mr Tokunbo Aromolaran, NAMA President (Left) and Alhaji Ibrahim Boyi, NAMA Vice president (right) with Mr. Jelani Aliyu, DG, NADDC(Middle), during the NAMA national executive’s courtesy visit to the council on Tuesday, 6th June 2017.

Change of Barton at NADDC: Significantly, confidence of auto industry stakeholders got ignited, following appointment of a renowned General Motors Senior Creative Designer, Jelani Aliyu as the new Director General, National Automotive Design and Development Council (NADDC). He replaced Engineer Aminu Jalal.

Upon resumption, he declared hope, made promises and unravelled his vision for the industry, one of which was affordable vehicle financing scheme, which would enhance the capacity of Nigerians across the country to buy new made in Nigeria vehicles, instead of patronizing second hand vehicles. That did not happen in 2017.

NAIDB Still Awaiting Signature: Cheering news it was that the Nigerian national Assembly, once again passed into law the Nigerian Automobile Industry development Bill (NAIDB). But the year 2017 ended. But almost two months after the passage, the bill is still sitting on President Muhammadu Buhari’s desk, begging for his signature without which it cannot become law.

Sinotruck, to be assembled in Nigeria by Dangota Group

Dangote’s Launch into Auto sector: Africa’s richest man, Alhaji Aliyu Dangote, a business mogul known to have his hands on most business pies in the country, established a $100 million truck assembly plant in Lagos.

Ahead of a $17 billion Refinery, petrochemical and fertiliser plants also located in Lagos that would have the capacity to produce 650,000 barrels per day when it commences operation in 2019, Dangote Group floated the plant in partnership with National Heavy Duty Truck Group Company Limited, (SINOTRUK), a Chinese firm.

Mr Anthony Chiejina, the Chief Corporate Communication Officer of Dangote Group said the plant, which has the capacity to produce 10,000 trucks annually, was established to save Nigeria huge foreign exchange being spent on importation of heavy duty vehicles.

Obviously, the plant will save Dangote Group cost of importing trucks for running its businesses, which as at the time of the truck plant launch numbered 10,000. And coincidentally, the plant has a capacity to produce 10,000 trucks per annum.

Not All Cheers for Dangote: Three and a half million truck tyres were reportedly nicked from Dangote stores. The tyres which bear the company’s imprint were stolen over some time.

According to the Coordinator of the company’s National Patrol Unit, Alhaji Abdullahi Magaji, a retired Commissioner of Police, who disclosed the incidence to newsmen, not less than 285 drivers had been declared wanted in connection with some of the theft.

”Already, 285 drivers identified to have collected 285 tyres have been declared wanted while a number of others are on the run.”

Unfortunately, customized or not, till the end of 2017, there was no report that any of the stolen tyres was found anywhere.

Sad News about Ajaokuta Steel Rolling Mill: Albeit a sort of positive note for President Muhammadu Buhari’s regime, federal government’s announcement that the nation’s Ajaokuta Steel rolling mill was 98% completed left sour taste in mouths of Nigerians with sense of history.

Reason: Foundation of the mill was laid more than 37 years ago (1980) by Nigeria’s former President, Alhaji Shehu Shagari. By 1984, the rolling mill attained 84 per cent completion. Afterwards, the project was budgeted for year-in-year-out, serving as a conduit pipe to defraud the nation for decades afterwards. No wonder, analysts viewed last year’s news as salt on an injury and a reminder of one of the factors that over the years hindered development of the Nigerian auto and allied industries.

This is an important project capable of supporting development of the nation’s auto industry and providing not less than 500,000.

Its foundation was laid in 1980. It reached 84% completion in 1984. And 2017, it crawled into 98% completion. Questions now are: How long would Nigerians and steel-using industries have to wait? Will Buhari’s regime change the dark history?

Peugeot 301: Launched by PAN Nigeria in 2017

Law Makers versus Nigerian Custom Service: One issue that generated controversy for almost half of 2017 was Federal government’s move to curtail vehicle smuggling. Following a ban on importation of vehicles through land borders, Nigerian Custom Service (NCS) issued a deadline for all vehicle smugglers to pay duties on them.

But Nigerian law makers did not only kick against the policy, they physically waged war against the Nigerian Custom Service (NCS). While the controversy lingered on, it was alleged that certain senators were unhappy about the policy, because some of them, especially the Senate president, were allegedly in practice of conniving with certain corrupt custom officials to smuggle expensive vehicles into the country. Senate President, Bukola Saraki denied the allegation.

Fuel queue at a Mobil Filling station in Lagos

Christmas Tears: Less than two months after the Nigerian national Petroleum Corporation (NNPC) celebrated continuous supply of fuel in the country without queues, fuel scarcity stormed the nation. Quick rush of the NNPC boss from London to Nigeria on December 5th 2017 had no impact on the problem. The Corporation blamed fuel major marketers, who also returned the baton of blame to NNPC. The nation’s motorists and Christmas/end-of-the-year holiday travelers suffered the consequence.

Although as at Tuesday, sanity seemed to be returning to Lagos and Abuja, scarcity still persists in many other parts of the country. But looking at the genesis of the problem,  observers still wondered why Department of Petroleum Resources, whose responsibility was to oversee the conduct of fuel marketers waited till the situation went very bad before they took actions. Certain fuel marketers unlawfully adjusted upward their pump prices. While others left it at the official price, but sold to motorists at N200 to N500 per litre. It’s not a story Nigerian motorists are likely to forget soon.

The Cheers

Fortunately, in 2017, the nation’s automobile and allied sectors recorded some cheerful and indeed significant developments during the year.

Ford’s assembly Plant launched in Nigeria in 2017

Ford’s Second African Plant in Nigeria: Motoring World’s editors joined other newsmen in Nigeria to tour the newly established Ford’s auto assembly plant located on a piece of land of more than 14 Hectares within Coscharis Group’s head office in Lekki, Lagos, courtesy of Coscharis Motors, Nigeria’s representative for Ford, jaguar Land Rover, BMW and Rolls Royce.

Addressing journalists during the media tour, Coscharis Group’s President/CEO, Dr Cosmas Maduka, said his company ventured into the project in response to the “clarion call of the Federal Government of Nigeria through the National Automotive Industry Development Plan (NAIDP)”.

Day two: Motoring World’s chief editor, Femi Owoeye, driving Suzuki Super Carry along Lagos Third Mainland Bridge

Suzuki Super Carry Launched: Boulos Enterprises Limited, Nigeria’s reputable auto assembler launched locally assembled Suzuki Super Carry truck into the Nigerian market. Motoring World editors were offered the truck for 48 hours test-drive. And we confirmed that it is truly a multi-purpose minivan that would “do exactly what it says on the tin.”

Quite significant is the fact that a good part of the truck is fabricated locally.

Tractor Manufacturing: Also cheering was The University of Nigeria Nsukka(UNN) and Hightech System Limited partnership in tractor assembling, manufacturing and other tractor value chain services as part of Higher Institution Tractorisation Initiative(HITI). The project would be domiciled at the Anambra Motor Manufacturing Company(ANAMMCO) plant, Enugu, with an Israel automotive firm providing mentorship and guardian manufacturing support.

Ade-Ojo, TNL’s managing Director: “We are beginning to see changes”(Copyright: Motoring World International)

Nigeria’s First Oil Well Became Tourist Centre: Year 2017 witnessed transformation of Nigeria’s first oil well (Oloibiri Oil Well), to a tourist centre, courtesy of the Nigerian Army. That transformation marked fifty-nine years after Nigeria’s crude oil hits the market.

Component Manufacturing: Hope about local content manufacturing for the nation’s auto industry brightened a bit in 2017, as component manufacturers from the National Association of Automotive Components and Allied Manufacturers of South Africa (NAACAM) visited Nigeria to seek prospect of components manufacturing in Nigeria. During their visit, the envoys discussed industry and trade matters with principal directors at the National Automotive Design and Development Council (NADDC) and other stakeholders. According to them, component manufacturers in South Africa are eager to come and invest in Nigeria’s nascent automotive industry.

The Association’s President, who is also Managing Director Shaterprufe, Dave Coffey, who led a four-man delegation to Nigeria, said: “We see a journey taking place in the country’s automotive programme and we’ve got a number of component manufacturers working under the banner of African Association of Automotive Manufacturers (AAAM) willing to come to Nigeria to partner and invest.”

Local Production of Speed Limiter: In line with a call by the Federal Road Safety Commission (FRSC) for development of the country through research, University of Ilorin, in partnership with some entrepreneurs, took a significant step towards mass production of vehicles speed limiter at affordable prices.

According to the University’s Vice-Chancellor of the University, Prof. Abdul Ganiyu Ambali, the device had been tested in-house, within the university campus and it worked.

“So right now,” he revealed, “we are at the stage of making mass production.”

At Last, Positive Changes in Auto Industry: Before the year 2017 disappeared, the nation’s auto industry had some cheering news. As the nation got out of recession, FOREX became more assessable. No wonder, Stallion Group successfully unveiled a vehicle at the tail end of the year.

Jacky Hathiramani, Managing Director, Kia Nigeria

Kia Motors Nigeria announced increased sales in the year 2017 with over 200% year-on-year sales from 2016. The company also expressed optimism to triple last year’s sales record in 2018.

Toyota Nigeria Limited (TNL) also confirmed that things were changing. During the company’s quarterly press briefing held on 29th November 2017, TNL’s managing Director, Mr. Kunle Ade-Ojo expressed optimism that his company’s market share would increase to about 24% by the end of the year.

According to him, although at the end of the third quarter of the year, the entire Nigerian auto market sold about 7000 vehicles out of which Toyota did about 1900, the economic factors militating against vehicle imports and sales in the country are changing.

He explained: “Remember we told you that we had to prioritize in the midst of limited funds and put our efforts on the fastest moving vehicles as much as possible. But that is a little bit changing as we get into the last quarter of the year. We now have passenger vehicles available. That is why I said we should be able to grow our market share to end with about 24%.

“We are beginning to see changes, most of which will come up next year. As we move towards the end of the year, we are beginning to see improvements on the purchases of Hiace.”

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