Auto assemblers seek N100bn intervention fund for vehicle acquisition

Auto assemblers seek N100bn intervention fund for vehicle acquisition 

Automakers and assemblers have called on the Federal Government to urgently put N100 billion intervention fund into a vehicle finance scheme to enable Nigerians to buy new vehicles and revive the industry.

This, they contend, will also speed up the development of the nation’s economy.

This view was canvassed at the Nigeria Auto Industry Summit held last Thursday in Lagos, where Minister of Industry, Trade and Investment, Dr Doris Uzoka-Anite, said automotive sector holds the key to reviving Nigeria’s economy and positioning the nation as a hub of automotive manufacturing in Africa.

The summit was organised by the Nigeria Auto Journalists Association (NAJA) in collaboration with the National Automotive Design and Development Council (NADDC) under the theme: ‘Developing Nigeria‘s Economy through the Auto Industry’.

Those who canvassed the view included an ex-Director of NADDC, Mr Luqmam Mamudu, Head Sales, Marketing and Logistics at Honda Automobile Western Africa Ltd, Remi Adams, and General Manager, Marketing & Corporate Communications at Coscharis Group, Abiona Babarinde.

They sought urgent government’s intervention in the auto finance scheme in order to make the industry vibrant.

The Federal Government on a number of occasions, according to Adams, has failed to keep its promise of bringing in commercial banks including a foreign bank to handle a proposed auto finance scheme using funds pulled from levies collected on imported vehicles.

Mamudu lamented that only two per cent of vehicles assembling capacity in Nigeria put at 500,000 vehicles per annum was currently being utilised.

He stressed the need to create the needed demand for such new vehicles and others through a sustainable auto finance scheme.

“Government should create an intervention fund of N100 billion for provision of affordable vehicle acquisition Loans,” he said.

While Mamudu wants the loans directed only to commercial vehicles fleet operators initially to flood Nigeria with shared car services, buses and trucks, others said it should be made open to all intending new vehicle buyers.

“Credible mobility private credit companies with verifiable track records in Nigeria should be identified and invited to participate in this revolving loan scheme.

“The scheme should be supervised by Security and Exchange commission (SEC),” Mamudu, now a automobile industry consultant, stated.

The stakeholders also called for adequate management of used vehicles importation through tariff so as to allow for consistent development of the nation’s automotive industry.

Speaking on the revival of the industry, a board member of Nigeria Automobile Manufacturers Association, Mr Benedeth Ejindu, stressed the need to pass the National Automotive Industry Development Plan (NAIDP) into law to engender investor confidence and breathe new life into the sector.

The Federal Executive Council (FEC) in May 2023 approved the NAIDP.

The system is expected to generate one million jobs and enforce patronage of locally produced vehicles by government and companies working on government contracts.

According to Ejindu, there is also the need to develop and implement an automotive raw material development and component manufacturing master plan.

“There is the need to revive battery, and glass manufacturing as a precursor to revamping local manufacture of welded parts (exhaust system, seat frames), elect Parts (batteries, trafficators, wiring harness).

“Others are plastic and rubber parts such as tyres, tubes, fan blades, seat foam, oil seals, radiator, cables, filters, brake pads/linings, windscreens, side glasses, fibre-glass parts and paints,” he said.

The Nigeria Customs Service, Lagos Chambers of Commerce and Industry (LCCI) and the Nigerian Automotive Manufacturers Association (NAMA) made presentations at the summit.

The stakeholders agreed on the need for collaboration and periodic meetings to harmonise different positions and strategies to avoid working at cross purpose for speedy progress of the industry and national economy.