▪︎Joseph Osanipin, director-general of NADDC
(Business Day)
Nigeria’s $210 million automotive industry is lagging peers such as Morocco, South Africa, and Egypt due to low demand for made-in-Nigeria vehicles and over-reliance on imported second-hand vehicles.
Statistics shows that Nigeria produced about 2,034 units of vehicles in 2023, estimated at $210 million and accounting for about 0.04 percent of the gross domestic product (GDP).
On the other hand, Morocco’s automotive industry produced 535,825 units of vehicles in 2023 valued at $31.4 billion and accounting for 24 percent of the country’s GDP.
South Africa, ranked as the continent’s second-largest automotive producer, made 633,337 units of vehicles estimated at $20 billion, contributing 5.3 percent to the country’s GDP. Egypt produced 23,754 units of cars valued at $1.5 billion, contributing 0.31 percent to the Egyptian GDP.
In Nigeria, Nissan Motors, Honda Motors, Innoson Vehicle Manufacturing Company, Hyundai Motor Company, Ford Motor Company, GIC Motor Companies Ltd, JAC Motors, KIA Motors, Dangote, Sinotrucks, Elizade, Lanre Shittu Motors, Mikano, Nord, PAN Nigeria Limited, Milkano International, and VON Automobile Nigeria are prominent automakers or assemblers.
In Morocco, over 250 car and components manufacturing companies, including Stellantis, Opels, BYD, Fiats and French automaker, Renault, operate.
Moroccan government offered subsidies of up to 35 percent for manufacturers to put up factories, expand ports, free zones and rail infrastructure, enabling the training of skilled workers. This has placed the industry in a good position to lure investments.
South Africa has companies such as BMW, Mahindra, MAN, Stellantis, Nissan, Ford, Toyota, Volkswagen, Mercedes, and Volvo Trucks.
In 1995, the South African government launched the Motor Industry Development Programme (MIDP) to encourage vehicle and component manufacturing through export.
This was succeeded by the Automotive Production and Development Programme (APDP) to increase local content input.
Nigeria’s vehicle assembling plants have a combined capacity of 500,000 vehicles per annum but produce about 2 percent of the installed capacity despite a combined investment of over N500 billion, according to the National Automotive Design and Development Council (NADDC).
“We are not getting the needed patronage from the Nigerian market, which explains why our plant is assembling below capacity at the moment. We don’t have the customers that we expected in Nigeria,” said Takashi Nakajima, managing director of Honda Automobile West Africa (HAWA), during a recent visit of NADDC to the plant in Ota, Ogun State.