The Nigerian government’s new policy to boost domestic auto production has resulted in a 20 percent drop in vehicles being imported into country, while 12 new vehicle assembly plants have been approved in the country, Business Day reports.
This means Nigeria has a total of 45 plants either in the works or in production.
U.S. auto manufacturer Ford was the latest car maker to announce it will start assembly in Nigeria. Its top-selling Ford Ranger pickup trucks will be assembled in Nigeria this year as it expands in Africa, Reuters reported.
The Nigerian government’s new policy to boost domestic auto production has resulted in a 20 percent drop in vehicles being imported into country, while 12 new vehicle assembly plants have been approved in the country, Business Day reports.
This means Nigeria has a total of 45 plants either in the works or in production.
U.S. auto manufacturer Ford was the latest car maker to announce it will start assembly in Nigeria. Its top-selling Ford Ranger pickup trucks will be assembled in Nigeria this year as it expands in Africa, Reuters reported.
Companies that have applied for licenses to assemble vehicles in Nigeria include the following, according to a PremiumTimes report on Aug. 3: Toyota, Honda, General Appliances West Africa, Perfection Motors Company, Richbon Nigeria; R.T. Briscoe Nigeria; Nigeria-China Manufacturing Company; Nigeria Sino Trucks; Coacharis Motors; DAG Motorcycle Industry Nigeria; Globe Motors Nigeria; Century Auto-Assembly Nigeria; and Concept Auto Centre.
The assembly plants are expected produce a range of automobile products including sport utility vehicles, passenger cars, pickup vans, buses, tricycles and motorcycles.
Nigeria introduced the National Automotive Industry Development Plan in 2013, introducing tariffs on vehicle imports to try and make domestic production more competitive, according to Business Day.
The goal of the policy is for Nigeria to eventually enter into car manufacturing, and create 70,000 skilled and semi-skilled jobs, according to Business Day.
Before Nigeria adopted its auto industry development plan, the country had 15 vehicle assembly plants with just three operational.
Fully built vehicles imported into Nigeria are now subject to significant increases in levies and duties. Taxes will increase from 22 percent to 70 percent for imported passenger cars and 10 percent to 35 percent for commercial vehicles.
To boost local assembly, there is no levy on importing materials and parts for full assembly inside the country and discounted levies of 5 percent-to-10 percent for partially assembled vehicles, Business Day reports.
Nigeria imports 500,000-plus cars a year, and 90 percent are used cars. The market for new and used cars in Nigeria is estimated to be worth more than $6 billion according to available statistics.
The auto market in Nigeria has huge potential but retails only a small amount of new vehicles annually, analysts say. The government’s policies aimed at encouraging industrialization, along with the country’s large population and potential for economic growth, make Nigeria an attractive market for automakers, according to Business Day.
*By Dana Sanchez
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