Toyota, Kia okay Nigeria’s assembly plants
Ade-Ojo and Minister of Industry, Trade and Investment,
Mr. Olusegun Aganga
Nigeria’s dream of being the hub of
automobile industry in West Africa has received a boost with two key
manufacturers agreeing to establish assembly plants in the country,
RASHEED BISIRIYU writes
The Federal Government’s new automotive
policy has attracted two major vehicle manufacturers, Toyota Motor
Corporation and Kia Motor Corporation, which have commenced preparation
towards setting up assembly plants in the country.
Indications emerged on Sunday that the
Japanese automaker, Toyota, had finally given in to pressure from its
representative in the country, Toyota Nigeria Limited, to start an
assembly plant in Nigeria next year if it hoped to retain its number one
position in the local auto market.
The move coincided with a confirmation on
Friday by Kia, a Korean firm, to roll out its first set of vehicles
from its Nigerian plant in September this year.
This is coming less than three months
after another auto giant from Japan, Nissan Motor Company, unveiled the
first set of Patrol jeeps assembled in its Lagos-based assembly plant,
which were presented to President
Goodluck Jonathan in Abuja.
The new auto policy announced in
September last year, which took effect on July 1 this year, had raised
the import tariff on fully built cars from 20 per cent to 70 per cent
for companies without assembly plants in the country, with a zero per
cent duty on imported Completely Knocked Down vehicles. The CKD refers
to the total number of parts required to assemble a vehicle.
The TNL and the National Automotive
Council, an agency of the Federal Ministry of Industry, Trade and
Investment, had before now, confirmed that the TMC was carrying out a
feasibility study on the possibility of setting up an assembly plant in
Nigeria.
Our correspondent reliably learnt on
Sunday that after two visits by a technical team from Japan, the TMC
agreed to set up an assembly plant in the country in July next year.
The one-year period, according to the
source, is to enable the country to stabilise its erratic electricity
supply, which the Federal Government says looks promising with the
privatisation of the power sector.
The team also reportedly raised the issue
of volume or the buying capacity of Nigerians as a major factor in
establishing an assembly plant.
But it got strong assurances from the TNL
that the markets in the neighbouring countries would also be mobilised
to buy their new Toyota vehicles from Nigeria.
“The good news is that Toyota has finally
agreed to set up a plant in Nigeria; we should expect it by July next
year; it is for real,” said the source.
The Chairman, TNL, Chief Michael Ade.Ojo,
first dropped the hint of a Toyota assembly plant in Nigeria last year
at the unveiling of the new generation RAV4 in Abuja.
He had said, “This is a serious plan that
should materialise soon by God’s grace; when we get most of the things
(required), I can assure you, we will get an assembly plant in Nigeria.”
He listed the conditions as regular power
supply and a big market to continually consume the volume that would be
coming from the assembly plant.
It is expected that a Toyota assembly
plant in Nigeria will lead to a reduction in the price of the brand of
vehicles; create more jobs, and result in improvement in technology and
economic development.
Ade.Ojo had said the company was carrying
out a survey to obtain necessary data that would lead to the
establishment of the plant.
Toyota currently sells between 18,000 and
20,000 new vehicles in Nigeria annually through its seven accredited
dealers nationwide.
The figure represents about 40 per cent
of the new vehicles being sold in the country every year; while imported
used vehicles, popularly known as Tokunbo, dominate the auto market,
with about 200,000 units yearly.
The Korean automaker, KMC, has also
announced its plan to roll out the first set of made-in-Nigeria Kia
vehicles from its plant in Lagos in September.
The automaker’s Africa and Middle East
Manager, Mr. Homer Kim, gave the indication at a ceremony to inaugurate
the Kia ultramodern showroom in Lagos.
A statement by the company on Friday said
Kia’s decision to establish a local plant in Nigeria followed the
“Federal Government’s proclamation of a modified National Automotive
Policy that seeks to revolutionise Nigeria’s automotive industry and
steadily discourage the importation of fully built-up vehicles.”
The KMA had in February this year signed
an agreement with Dana Motors Limited, its representative in Nigeria, to
undertake a long-term investment in assets development, including the
provision of technical knowhow and setting up machinery for the local
plant.
Kim said the plant would immediately
begin to assemble select Kia models such as Kia Rio, Cerato and Optima,
which are in the A, B and C segments, and commence a full scale
production of the entire Kia range next year.
He said, “We will immediately begin to
assemble a few models, including Kia Rio, Cerato and Optima because of
the huge model line-up of Kia, and by mid 2015, ceteris paribus (all
things being equal), the entire Kia range will be made locally.
“This, in essence, implies that not a single Kia model will be imported into Nigeria from Korea.”
The Managing Director, Dana Motors, Mr.
Jacky Hathiramani, said the company was proud to be associated with the
Korean automaker and hoped to replicate the Kia quality in Nigeria.
The Director-General, National Automotive
Council, Mr. Aminu Jalal, who lamented that Nigeria spent N550bn on
importation of vehicles annually, also told our correspondent that no
fewer than 12 auto firms would begin to assemble vehicles in the country
by the end of the year.
He also confirmed that Toyota was coming right after them.
Earlier in the month, Peugeot Automobile
of Nigeria, now Pan Nigeria, had revived its moribund assembly plant in
the country, with the commencement of Peugeot 301 production in its
Kaduna factory.
The Managing Director, Pan Nigeria, Mr.
Ibrahim Boyi, had said, “The plant is now equally fitted to handle
multiple Original Equipment Manufacturer brand assembly. When
operational, we will require additional 250 workers at the SKD level and
over 1,000 workers when we migrate to the CKD.”
Source: The Punch
