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Local Vehicle Assemblers Struggle Amid $1 Billion Investment, Lament Low Demand



Nigeria’s auto industry has continued to struggle due to low demand and the influx of used cars, despite a $1bn investment.

Despite investing about $1bn under ex-President Goodluck Jonathan to revamp the industry, the Nigerian automobile industry continues to underperform despite having the largest market in Africa.

The penchant for new foreign vehicles and imported used cars has caused local carmakers to continue battling with local patronage. The high cost of production in the country has made locally manufactured or assembled cars out of the reach of many mid-low income earners. They have to opt for foreign-used ones, which are more affordable. High-income earners, on the other hand, prefer to go for imported cars.

Recently, there was an outcry from Nigerians when the 469 members of the National Assembly spent N58bn on imported sport utility vehicles.

According to industry data, the overall demand for vehicles in Nigeria is about 400,000 units, the demand for new made-in-Nigeria vehicles is only about 2.5 per cent of this figure, and about 75 per cent of this is attributable to the imported used cars market.


The National Bureau of Statistics Foreign Trade in Goods report shows that import bills on used vehicles increased quarter-on-quarter by 956 per cent to N733.9bn in the second quarter of 2023 from N69.49bn in the first quarter.

In 2014, the National Automotive Design and Development Council, the industry regulator, issued licenses to over 40 firms to set up vehicle assembly plants with a view to making Nigeria an automotive hub.

Under the 2014 National Automotive Industry Development Plan, former President Jonathan introduced vehicle import tariffs of 70 per cent to discourage import, and digital solutions to check smuggling.

Vehicle smuggling is one of the most smuggled gods in the country, which has made it difficult to track the exact figures for imported vehicles.

However, that automobile initiative has been updated to a 10-year NAIDP, which spans from 2023 to 2033. One of the major objectives of the plan is to boost local vehicle production to 200,000 units within the period.


Achieving a production target of 200,000 units by 2033 will require significant investment, estimated in the range of $6.3bn-$15.8bn across the industry value chain, the Federal Government stated in the plan.

As of March 2023, the total number of licensed automobile manufacturers/assemblers in Nigeria was 37, according to a note by the Director for Policy and Planning, NADDC, Musa Sani. The note titled “Updated List of the Accredited Locally Manufactured Brand in Nigeria” was obtained by The PUNCH. The document also specified the installed capacity, product, and brand name of the auto companies.

PAN Nigeria Limited, Milkano International, and VON Automobile Nigeria are the top three companies with installed capacities of 25,000, 46,000, and 39,000, respectively.

The industry regulator stated in the 10-year NAIDP that various auto assemblers in Nigeria had so far invested over $1bn in the industry.

Revenue generated


The country’s automotive manufacturing industry raked in $400m in 2022 (N302bn), according to MarketResearch.

The NAIDP 2023 report stated that the country’s automotive sector is the 3rd largest in Africa. However, going by its 2021 output of 10,400 units, the local industry accounted for less than one per cent of the total production in Africa.

The report noted, “In comparison, Nigeria’s domestic demand has maintained a historical growth rate of about 2.3 per cent over the last 10 years and is estimated to grow to about 503,000 units by 2032.

The exact number of auto manufacturers operating in the country at full capacity remains unclear. Experts said Nigeria’s auto companies were largely involved in assembling rather than manufacturing.

The Chief Executive Officer of Saglev, Sam Faleye, said at a press conference recently that it had secured regulatory approval from NADDC to set up an auto assembly plant.


Licensed automaker, Lanre Shittu Motors, also announced plans to introduce electric and CNG vehicles assembled at its plant in Ogun State before the end of 2023.

The President of the Automobiles and Road Safety Initiative, Samuel Oriowo told The PUNCH, “When we talk about making cars, it is important that we create them from scratch using materials like steel and engines. This means building complete vehicles herein.

“However, nowadays, most of the cars are only assembled here. The major parts are made in other countries, and we just add small things like doors and headlights. This makes it less meaningful for our local industry.”

The Vice President of Automobiles and Road Safety Initiative, Eduwaye Henry, acknowledged that the initiative by former Nigeria’s President to give licenses to auto operators had shown some results, such as Innoson Motors operating in Nnewi, Anambra.

He noted, “There were plans to restart Peugeot in Kaduna, but the current status is uncertain.”


High cost

Industry insiders say Nigerian assembled cars were unaffordable, “they are more expensive than imported cars, which are largely used cars.”

The Chairman of Automedics Motor
International, Yusuf Adah, confirmed to The PUNCH, “Several automobile companies in the industry, including mine, are licensed to manufacture cars and other vehicles in Nigeria. For instance, Innoson vehicles are designed and produced with the Innoson trademark in China and then assembled in Nnewi, Nigeria.

“To be frank, we don’t have a proper vehicle manufacturing company in Nigeria right now. What we have can be better described as assembly plants.

Meanwhile, Adah revealed that the main problem was that “We lack the necessary technological support systems. Assembling vehicles in Nigeria is even more expensive than importing fully-built cars from America and China.”


The industry regulators had attributed the challenges confronting the industry to heightened volatility and consumer pressure due to high inflation and exchange rates. It noted because of that manufacturers were grappling with increased production costs and significant reductions in profit margins, as they were compelled to source from parallel markets at considerably higher rates.

Government support

According to automotive experts, the government has a critical role to play in fostering the growth of the country’s auto industry. They stressed the need for the government to make a concerted effort to bolster local assemblers by prioritising the purchase of made-in-Nigeria vehicles.

The Chief Executive Officer of Nord Motors, Ajayi Oluwatobi, argued that increased governmental support for local assemblers would not only stimulate economic activity within the country but also fortify the local automotive sector against external influences.

“The government should initiate interest in these vehicles. The revenue and the support from the government will be leverage for local manufacturers to grow.


“We believe that the government can support the growth of the second-hand market by mandating the purchase of locally made vehicles by civil servants. This approach proved successful in the past, such as the closure policy, where the government made it mandatory for officials to drive vehicles made in Nigeria.

“Currently, our vehicles, notably our flagship model, are of excellent quality, consistently winning bids in various competitions. By encouraging government officials to adopt these vehicles, a flourishing second-hand market could emerge within four years.

“As people recognise the durability and quality of our products, the second-hand market would likely expand, leading to long-term market dominance. This is a gradual process that requires strategic steps, starting with government support and local production,” he said.

Despite the outcry that greeted the procurement of imported vehicles for lawmakers, they had justified it. The spokesperson of the House of Representatives, Akin Rotimi, in a statement, said that the purchase of vehicles for legislators was in accordance with extant procurement laws, and had been the practice in previous Assemblies.

Reacting to this development, Oluwatobi said, “We have a capacity of over 9,000 units a year. So, that is about close to 1,000 a month. So, we can easily make those vehicles in one month if we get the notification in advance.


He stressed the need for government officials and political officeholders to buy Nigerian-made vehicles, which according to him, are of the same standard as the ones being imported.

“We import the vehicle components from where the biggest brands in the world buy from. I buy from the best Original Manufacturer Equipment. It is the same.

“Again, and I just really think that going forward, they will understand the importance of showing people that you also support your own country and you believe in your country.”

The Head of Corporate Communications and Affairs at Innoson Group, Cornel Osigwe, in an interview, expressed deep concern over the current government trend of favouring foreign vehicles over domestically manufactured ones.

Osigwe emphasised that while various government agencies, including the military, police, and state governments are ostensibly supporting initiatives to patronise Nigerian-made vehicles, there was a pressing need for a more robust and effective implementation of the public procurement policy.


He stated, “Last week, there was misinformation about the absence of a vehicle manufacturing plant in Nigeria, but we have invited individuals to witness our progress.”

He underscored the global competitiveness of Nigeria’s automotive industry, urging other countries to recognise and patronise Nigerian-made vehicles.

Drawing parallels with developing economies like India, Osigwe noted the significant annual vehicle production capacity, highlighting the imperative for Nigeria to focus on its automobile industry for sustained economic growth.

He pointed out that the current disparity in vehicle production, with less than 20,000 made-in-Nigeria vehicles sold annually, was indicative of a significant dependence on foreign vehicles.

He stressed that prioritising and supporting local vehicle manufacturing would not only stimulate economic growth but also have positive cascading effects on associated industries.


Osigwe urged the government to thoroughly consider the extensive benefits of patronising locally made vehicles and called for strategic investments to promote and subsidise the Nigerian automobile industry.


DSS To Start Using Weapons Produced By Personnel – Bichi



The Department of State Services (DSS) said on Saturday it will soon unveil weapons produced by its personnel.

This was disclosed by the DSS Director General, Yusuf Bichi, at the graduation ceremony of the Executive Intelligence Management Course (EIMC) 16 participants in Abuja, the nation’s capital.

According to him, the DSS will soon begin to “produce what it eats and eat what it produces.”

Among the weapons the Secret Service will soon unveil are Unmanned Aeriel Vehicles (UAVs), he stated.

Bichi also assured that the agency will continue to support the National Institute for Security Studies to succeed in its quest to impart knowledge that will enhance security in the country.


He charged the participants to utilise the skills they have acquired to develop the country, urging Nigerians to remain patriotic and shun those whom he described as warmongers who want to set the country on fire.

Also at the event is the Vice President, Senator Kashim Shettima.

The Executive Intelligence Management Course (EIMC) 16 commenced in February 2023 with 89 participants drawn from 35 agencies across Nigeria and four other African countries, namely, Niger, The Gambia, Rwanda and Chad.

Three participants lost their lives during the period, leaving 86 participants who graduated on Saturday.

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53 power projects worth ₦‎122bn to be completed by May 2024 – TCN



The Transmission Company of Nigeria (TCN), has said that 53 ongoing power projects worth N122 billion is to be completed by May 2024.

TCN and power distribution companies with support from the Central Bank of Nigeria (CBN) will finish up these projects that are currently being constructed across the country.

Punch reports that the projects entail the delivery of eight 150MVA power transformers, 19 1000MVA transformers, 60MVA transformers, reconductoring existing transmission lines (conductors and accessories), upgrading of the existing 132/33KV substations, and construction of 33KV line bays.

While visiting three different projects at Ojo, Isolo, and Oworonshoki Transmission stations in Lagos on December 6, Mathew Ajibade, Programme Coordinator at TCN, mentioned that once these projects are finished, they will increase the company’s ability to transport electricity by over 1,000 megawatts.

He said:


“The projects are currently being implemented through the project management office at the TCN headquarters in collaboration with both TCN field engineers and the Discos technical team. The time set for completion of the projects is May 2024 latest. PMO made progress with the implementation of the programme despite challenges encountered and is committed to ensuring the successful implementation.”

Tumba Tijani, who is the Assistant Director and oversees the Infrastructure Finance Office at the Central Bank of Nigeria (CBN), clarified that the central bank provided a loan for the project in August of last year. This loan was given at a 9% interest rate.

He mentioned that a total of N85.43 billion has been given out to 53 different contractors involved in the projects. This money has been disbursed into the Advance Payment Guarantee account to help these contractors carry out their tasks.

He said:

“The CBN in continuation of its intervention in the power sector approved the sum of N122, 289, 344 for the programme Nigeria Electricity Market Stabilization Facility-3 based on the projects estimated for the identified projects.


The facility aims to resolve the transmission/distribution interface bottlenecks to improve supply to end users and unlock the unutilized generation capacity in the country,”

Why transmission?
The Minister for Power, Adebayo Adelabu, mentioned before that even though the country has handed over the responsibility of generating and distributing power to private entities, the part that handles transmitting electricity is still managed by the government.

However, this area hasn’t seen enough progress mainly because the infrastructure, such as substations, transformers, and power lines, is getting old and isn’t strong enough.

Adelabu promised that the government would focus on reorganizing and improving this infrastructure. The aim is to ensure that all Nigerians experience better and more reliable electricity supply across the country.

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