FG Moves to Expand CNG Vehicle Production, Targets Cheaper Transport Fares

The Federal Government has stepped up efforts to strengthen Nigeria’s automotive industry and promote more affordable transportation through collaboration with local vehicle manufacturers, following visits to two manufacturing facilities in Anambra State.

Board members of the National Automotive Design and Development Council (NADDC) inspected the facilities of Innoson Vehicle Manufacturing (IVM) in Nnewi and Kojo Motors Auto Assembly in Umunya to assess their production capacity, identify operational challenges and explore ways to support indigenous manufacturers.

The visit comes amid the Federal Government’s drive to expand the use of compressed natural gas (CNG) and electric vehicles as alternatives to petrol-powered transportation, with the aim of reducing operating costs and making public transport more affordable.

The manufacturers welcomed the government’s new policy directing ministries, departments and agencies (MDAs) to patronise locally manufactured vehicles, saying it could increase demand for their products and strengthen domestic production.

Secretary to the Government of the Federation, George Akume, had issued a circular directing government establishments to purchase vehicles from local manufacturers.

Managing Director of Innoson Vehicle Manufacturing, Chief Innocent Chukwuma, said he was encouraged by the government’s emphasis on CNG, describing the fuel as an important option for sustaining Nigeria’s automotive industry amid rising petrol and diesel costs.

Chukwuma disclosed that the company had dedicated its newest large-scale facility to producing CNG-powered trucks and electric vehicles.

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He said wider adoption of CNG could help lower transportation and operating costs while supporting local industrial growth and creating employment opportunities.

The industrialist also called for stronger backward integration in the automotive sector, arguing that manufacturers should focus on producing components that Nigeria has the capacity to manufacture competitively.

At the Umunya facility, the executive director of Kojo Motors, Chinedu Oguegbo, said the company was concentrating on commercial vehicles designed for Nigeria’s transport needs.

He said the company had begun benefiting from the government’s local vehicle procurement policy but had faced challenges arising from the sharp depreciation of the naira and exchange-rate fluctuations.

Oguegbo added that the company was developing its natural gas facility, which he expected to become operational in the future. He also expressed optimism that the company’s Omma Bus brand could eventually be exported to international markets.

NADDC Director-General Oluwemimo Joseph said the inspection was intended to give the council first-hand knowledge of the challenges confronting local vehicle manufacturers.

He explained that the council was reviewing existing policies and working on proposed legislation to improve the operating environment for the industry.

According to him, information gathered during the visits would help the council develop measures to address manufacturers’ concerns and identify vehicle components that could be produced locally.

Joseph said Nigeria had numerous small and medium-sized enterprises capable of supplying components to the automotive industry, adding that stronger partnerships could create new business opportunities and reduce dependence on imported parts.

He also acknowledged concerns about the effect of imported used vehicles on local manufacturers, noting that the council was considering measures to address the competitive disadvantages faced by domestic producers.

NADDC Chairman, Chief Emma Eneukwu, said the council was advocating legislation to protect local vehicle manufacturers from the influx of imported used cars.

He argued that local producers needed a more supportive policy environment to compete effectively and expand production.

The Federal Government’s broader CNG and electric mobility programme is designed to reduce transport costs by encouraging the deployment of vehicles powered by alternative energy sources. However, the impact on passenger fares will depend on the availability of vehicles, refuelling infrastructure, operating costs and the extent to which transport operators pass savings on to commuters.

The Anambra visits form part of efforts to strengthen local manufacturing, encourage investment and improve the availability of vehicles for Nigeria’s public transportation system. While the collaboration could support cheaper transport over time, the visits did not announce a specific new fare reduction or implementation timetable.