Why the new automotive policy is driving on empty

Proshare

Thursday, October 24, 2013 /09:20 AM / FDC

 

Salon cars soon to be manufactured in Nigeria!!! - This is the vision of the Minister of Trade and Investment- Dr. Olusegun Aganga who first announced the new automotive policy for Nigeria.

 

The government is at an advanced stage of promoting the full manufacture of cars in the country. If successful, this will make Nigeria one of the emerging markets where saloon cars are manufactured and fully built up, not just assembled. Others are India, China, Korea, Brazil and South Africa.

 

Like most policy statements in Nigeria, this may be just another pie in the sky. Already there are talks of prohibitive import duties even before the Final Investment Decisions (FID) are made.

 

Mr.Cosmos Maduka,CEO, Coscharis Motors said:

 

"Forget about these stories. Anybody who tells you in this country that he is manufacturing vehicles is telling you a laughable story. Take my word for it, it is not a joke. You cannot manufacture a car when we do not have flat steel. We do not have a petrochemical industry. What are you manufacturing when you bring in parts and couple them? This is not manufacturing. Manufacturing of vehicles is assembling. And when you bring in 100 percent of what you are assembling that business cannot be competitive. This is cosmetic".

In an attempt to make sense of it all, FDC recently issued out an incisive piece Making Sense of the New Automotive Policy which looked at the merits of the policy and the necessity and expedience of first of all attacking the grey market and motivating car importers who should naturally integrate backwards into manufacturing.

 

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