Nigeria Approves Licences for 35 Firms to Assemble Cars



The federal ministry of finance has approved licences for 35 companies to assemble cars in Nigeria in line with the new auto policy which has seen existing assembly plants established in the 1970 resume operations

By Anayo Ezugwu  |  Oct 12, 2015 @ 01:00 GMT  |

THE federal ministry of finance has approved licences for 35 companies to assemble automobiles in Nigeria. Aminu Jalal, director-general of the National Automotive Council, NAC, said at the maiden edition of the Automedics Autofest 2015 in Lagos, on Monday, September 28, said that nearly all the existing assembly plants established in the 1970s and 1980s have resumed operations, some at the Completely Knock Down levels.

According to him, “From October 2013 till date 35 companies have been licensed by the federal of finance to assemble automobiles in Nigeria. Already, totally green plants have commenced CKD operations. Installed capacity is 358,000 new vehicles per annum. Statistics on actual production is being compiled,” he said.

According to Jalal, 90 percent of the investments in the auto policy had been done by local entrepreneurs, warning that all that had been achieved so far could be lost if the response from stakeholders became protracted. He lamented that the slow pace of implementation of the auto policy was making some of the investors to think twice.

Jalal said, “The National Automotive Industry Development Plan has a vehicle purchase scheme to leverage on the levies collected on imported fully built vehicles. This will make vehicles available to Nigerians at costs below market rates and under friendly terms. Application for operating licence has been sent to the Central Bank of Nigeria and another to the accountant general of the federation to access the cumulative levies collected.”

He noted that until the levies would be accessed, the 35 per cent levies on used vehicles could not be applied, and described this phase as troubling for the car assemblers.

Kunle Shonaike, managing director, Automedics Limited, said the Autofest was put together by the firm in partnership with the Lagos Television to showcase the depth and extent of resources available in the Nigerian automobile industry. He said, “This is the reason we are exhibiting today, not only automobile and accessories’ companies, but also an array of other players in the automotive industry such as insurance companies, motorbike manufacturers, spare parts dealers and others.

“Today, we are launching the online version of our training institute and for those of you who wish to buy spare parts and consumables from the comfort of your homes or offices; our online shop front will be useful in getting original automobile products.”

Following the increasing numbers of imported cars over the last few years, the administration of former President Goodluck Jonathan set its sights on building a domestic capacity to assemble, and ultimately manufacture, cars. The focus was partly driven by concerns over the impact of car imports on foreign exchange reserves but also by a desire to diversify and industrialise the economy, which relied heavily on oil revenues for the last three decades.

In the past, the country did manufactured cars through several international car manufacturers which had partnerships agreements with government and local factories in the 1970s. They had an annual output of about 108,000 cars. Nigeria’s nascent car industry subsequently withered away like an infested plant due to high production costs, limited innovation and a rise in imports as trade policies were liberalised and smuggling increased.

Prior to the introduction of the policy, industry data showed that the country’s annual spending on vehicle imports was estimated at $6 billion but the country recorded a drop of 20 percent in the volume of imports since the first phase of the auto policy was introduced in July 2014.


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