My plan was to sell new SUV model for N1m - Innoson Group chairman – Newstrends
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My plan was to sell new SUV model for N1m – Innoson Group chairman

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‘What I did chased tokunbo motorcycles away from the Nigerian market’ 

Chief Innocent Chukwuma, founder and group chairman of Innoson Vehicle Manufacturing Company, who recently marked the 13th anniversary of the auto company, spoke with some motoring journalists on a number of burning issues about the firm and the industry along with his plans for the business.
NewsTrends was there and reports:

Tell us your journey into the automobile business?
What I am doing today in auto manufacturing, I had earlier done in the motorcycle industry and succeeded. The time I joined motorcycles, there were five companies that were dealing in motorcycles. First was Leventis dealing in Honda; Yamako was dealing in Yamaha; Bolous Enterprises dealing in Suzuki; and CFAO was dealing in Kawasaki and Moblet. I brought Jianshe motorcycles (to the country) which were under me.
I studied what the big companies were doing. They were bringing 36 units of fully built motorcycles in one 40-foot container. So with the 36 units in one 40ft container, I did all the expenses on the container and their cost was very high. As a motorcycle expert, before I joined, I calculated the cost and expenditure; then, a motorcycle was N150,000 per unit. I calculated the component parts that make up one motorcycle and found out that the total cost was not up to N150,000. So I decided to go and import the motorcycles in components (instead of ready made). I listed the parts and brought them in, and used local technicians to assemble them in Nnewi. My container of motorcycle components, the same 40 feet, could carry as much 150 units in one, instead of 36 units those companies were bringing in as fully built. As a result, my own motorcycle price was lower than theirs and I sold the first consignment at N800,000 per motorcycle, while they were selling N150,000.
Clients tested it and found out that it was equally good. I did it for about five years like that without competition before others discovered what I was doing and joined. As they were joining, I found another way of making it cheaper. I opened a plastic factory in Enugu to produce the plastic components so that the price would be okay. When I started this component parts, some of them that joined started buying the component parts to sell their own. By then we had dropped the price of one motorcycle to N60,000. From N150,000 to N60,000. Those who bought my plastic components were also selling N60,000, but those who were not buying from me were selling higher. So, they bought my plastic and business was moving. That was when I said let me go into the automobile. Before I did it, people were only using second-hand motorcycles. What I did stopped the use of second-hand (tokunbo) motorcycles because the new motorcycles became cheaper than second-hand motorcycles. That was what chased tokunbo motorcycles away from the Nigerian market.
If you watch in Nigeria today, people are buying second-hand vehicles. That was why I decided to go and develop the auto industry. If not for the foreign exchange issue, that is the weak naira against the US dollar at forex, people would have been buying new vehicles at cheaper prices in Nigeria now. For instance, I planned selling one of my sports utility vehicles (SUVs) for N1 million for all to buy. But because of foreign exchange issue, the vehicle is going for N10 million now.
People that import new vehicles cannot sell at their own price and that means we are still at an advantage.

What are your challenges since you started the auto manufacturing journey of 13 years ago?

I would say the journey has been full of ups and downs. But we still managed to survive. Starting from when I was building this factory, a lot of challenges came up. Some people came to the factory and kidnapped the workers, including (Chinese) foreigners and Nigerians. They took them away and started calling me.
The second one was when GTBank wanted to shut down this place. Every Nigerian knows about it. I went to court and finally defeated them. GTBank is still owning me up to today.
When we started, electricity was very poor even though it has improved now. What about the challenges of sourcing foreign exchange? I am a manufacturer. We are in a better position than importers. This is because what we import is not everything we are using in the manufacturing of our vehicles. So we import a few items and use local materials to complete our needs. But importers of ready-made goods import 100 per cent, which means that their forex requirements are higher. So I can say that foreign exchange depends on a number of things; sometimes, you do some export and get foreign exchange. Government allocation of foreign exchange is no longer working.

How do you get funds for your projects?
Normally, banks are supposed to be sponsoring businesses, but they are not sponsoring the industries. Nigerian banks are trading in foreign exchange. They are no longer sponsoring (supporting) productive ventures, like manufacturing. Any investor that relies entirely on banks will fail because the banks will even crush him. Banks are not ready to support manufacturing. They can support people that import oil, but to support manufacturing, banks are not ready to wait, because manufacturing cannot bring that type of quick money they want on a daily basis. We are trying to manage so that we don’t need to borrow so much to manufacture.

What is the percentage of local content in your auto manufacturing, and how do you source them?
We source some of the items we use locally and we import some. For example, we produce plastic components of the vehicles like bumper, dashboard, front grille at our Innoson Technical and Industrial Company Ltd, in Enene, Enugu. We are in a position to buy any item that anybody can produce locally. We don’t need to import any of the items we can get in Nigeria.
The local content used in my vehicles are not less than 65 per cent.
But we are still importing engine and gearboxes. The country they come from depends on the model we are doing. I don’t produce tyres but when we need tyres we reach out to tyres dealers and tell them what we want.

You made an attempt at tyre manufacturing many years ago. How did it go?
National Environmental Standards and Regulations Enforcement Agency (NESREA) said we cannot produce tyres because they did not authorise it. So we shut down, despite having invested a massive part of our resources in the project and imported some heavy equipment.

Are you not disturbed that in your 13 years of existence, Nigeria has witnessed three Presidents and none of them has used IVM which is the practice in other vehicle producing nations?
I cannot say that our Presidents are not using my vehicles, because I have not checked their fleets. It is people that are close to them that will check and find out. My vehicles are in the market and anybody can buy. I cannot say they are not using it. For instance, I never knew that the Lagos State Government was using my vehicles until someone told me.

How did you get the seed money for this huge investment? Again, where do you get the steel?
On steel, I don’t produce steel. I buy from steel dealers in Nigeria. When I need steel, I tell them the size I need and sometimes, they source it locally or from outside. We have a caliper to check the millimeter to confirm the gauge. If they are not up to the quality standard, we reject them.

What are your plans for motorsports? Nigeria is big with a large market. My focus is to conquer the motor needs of people in Nigeria and beyond. The people that are doing motorsports in other places have conquered this for a long time before they joined motorsports. I will join that when I conquer the people’s vehicle needs in Nigeria.

Do you have the facility to test vehicles and what is your daily or annual production capacity?
We have the facility to test vehicles. We have that section. I do 50,000 units and with what we are building, our factory is to produce 60,000 units annually if there is demand. We don’t produce and keep because of where to keep them. But we have an installed capacity that can handle the production, if there is the need. When there is a demand, we open up the production line and employ more people. When you are producing like 10 vehicles a day; when there is demand, you can make those 10 vehicles to 100 vehicles per day. What you do is to add workers times 10. Then what will take you one hour to do, you will do it in 10 minutes. We have the capacity to produce 60,000 if there is the demand.

What capacity do you have for conversion of vehicles to CNG?
We can do conversion. Government said they brought in conversion kits, but I don’t know how or what they imported. I convert for people.

What are the advantages of CNG-powered vehicles?
President Tinubu has done Nigeria some good by removing subsidy and introducing CNG. Any day, people understand what the CNG is, they will be happy with the government. I started the production of the CNG vehicles two years before it was formally introduced following the removal of oil subsidy on May 29 by the President. As of the time the government announced the removal of subsidy on petrol and the talk about CNG as an alternative commenced, I already have up to 100 units of vehicles running on CNG on the ground, parked here in the factory. It happened that way because I knew that one day, subsidy would be removed. I have vehicles that are powered by the CNG in all the IVM models, and I also convert for people who are driving Innoson. I want to give them the advantage first because they are my customers.

What are your views about the automotive industry in Nigeria?
My view is that if everybody supports the automotive policy, it will go well. The automotive industry is the way forward and I want Nigeria to be leading the industry in Africa.

You were approached by Abia State government to supply some vehicles but you turned it down. Can you shed more light on that?
What happened was that they needed 100 vehicles and I supplied 80. I told them that the remaining 20 would be ready in 14 days. But they said they needed it immediately. Then I told them they could buy from shops. I am a manufacturer and not a trader. They said they needed the 20 units immediately; that it was for security. The governor is one of my best friends, even before he became governor. He doesn’t joke with my products and that is why if you go to Abia State today, you will see my vehicles everywhere. Even the governor himself is using my vehicles.

You also have issues with Imo State Government. Has it been resolved?
No, it hasn’t been resolved. They just seized the money for almost three years now. The amount is N2. 6 billion for 150 vehicles I supplied to them. Today, the money has gone up to N7 billion. I am in court with them.

The vision of Innoson is to conquer the Nigerian and African market. How many products have you been able to export other African countries?
I have got up to 15 contracts from different countries outside Nigeria. The reason we don’t export from Nigeria to other African countries as often as we want is because Africa does not have shipping lines that go round the continent. Sometimes, when you export to Ghana, the vessel will first carry the containers to Europe before going to Ghana. But if we have shipping lines that go round Africa, Africa has a lot of things that they can export to each other. But if you watch, getting something from other African countries is difficult. If African countries want inter-Africa trade to grow, they should have shipping lines going round Africa. Without that, trading among African countries will be difficult.
I tried to service the 15 contracts but I found out that the problem is unavailability of shipping lines to carry the consignments for them. When they run into that difficulty today, they would not come back to you tomorrow. Some of the countries I have exported vehicles to are Ghana, Sierra Leone and Senegal.

What encouraged you to look home-wards in terms of locating your assembly plant in Nnewi?
It is not that I looked home-wards. The fact is that I don’t like crowds. I think I like where traffic will not be holding me down on the road so much. That was why I decided to be here in Nnewi and Enugu. Other places like Lagos and Onitsha are filled up. So I came down to Nnewi so that it would be easy for me to coordinate.
Right now, I have two factories in Nnewi and accessing them is very easy for me. But if it is in Surulere or Apapa in Lagos, how will I go?

What is the secret of business success of the Nnewi people?
Nnewi people, starting from origin have the keys of business. Remember the late Louis Odumegwu Ojukwu, who was the leader in Nigeria even before the war. Most of our people are business people; they are used to business. Each town has something unique to them and in the case of Nnewi business is their uniqueness.

Where will Innoson be in the next 10 years?
I believe that in the next 13 years, Innoson will be everywhere in Africa.

What are your succession plans?
It doesn’t mean that I am the one doing all the job. People are doing it. And those that are doing the job are younger than me. Didn’t you see that we rewarded some of the people that started with us at our 13th anniversary event today? This is because they are very important in our business? They stayed with us for a long time and we gave out 15 motorcycles to them. I sent our factory manager to China and trained him for eight years. Besides, they are all my friends and we eat at the same table. They love me and they cannot harm me.

Can you tell us something about the new factory in Umuezena, Nnewi?
That place is 400,000 square-meter land space. One of the buildings I am putting up there is 40,000 square meters. There will be three factory buildings, bringing the total to 120,000 square meters.

Which of the IVM models is the fastest selling in your lineup?
Vehicles are like a fashion items. This year, vehicle B can be the fastest selling; next year, vehicle D will come up. We produce all to sell. You cannot say this is the fastest. Three things determine the rate: One is the price; number two is usage; and number three is the utility, like buses and pickups which are built for commercial use. All of them are doing very well. However, what we do is that anyone that is not doing well, we stop it and replace it with another model. That is why I am manufacturing.

How have your people in Nnewi felt the impact of locating your factory in the town?
Locating this factory in Nnewi is one of the good things that have happened to the South-Eastern part of Nigeria. It is bringing a lot of things here. For example, when the Federal Government decided to build an industrial hub for the auto industry, they located one in Lagos, another in Kaduna and one in Nnewi here because of this factory.
In addition, it provides employment. When I finish constructing the factory I am now building in Nnewi, I will employ another 2,000 workers and I prefer to employ people who are at home here. It is one of the good things that have happened to the people.

What are your plans on electric vehicles?
I will shock you on what I am going to do with electric vehicles. I am doing vehicles; if you want me to power with electric, I will power it with electric. If you want CNG, gas, fuel, I will do it for you immediately.

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How to lower fuel consumption of your car

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How to lower fuel consumption of your car

When President Bola Tinubu announced an end to fuel subsidy at the inception of his regime in 2023, many motorists were jolted by the expected impact it would have on the cost of keeping their vehicles on the road.

Many Nigerians were also concerned about the impact it would have on the cost of living, especially the prices of goods, services and transportation.
And their fears were genuine; prices of goods went up astronomically and there were complaints of hardship all over the country.

This led to a swift drop on the sales of big cars, especially Sport Utility Vehicles. Many Nigerians quickly parked these cars in their homes and some immediately put up theirs for sale while others quickly bought smaller cars that they presumed would consume less fuel. They forgot that the rainy season would not be fair to the roads and their new small sedans, especially the bumpers and underneath the cars.

Those living in flood-prone areas like Lekki and some seasonally flooded areas in Rivers, Delta and Bayelsa states can attest to the advantages of SUVs over sedans from their expenses. With some of these expected challenges, it didn’t take long for the average Nigerian motorist to adjust and live with the negative impacts of the fuel subsidy removal.

Though the challenge persists, coupled with the poor state of the roads across the country, it has been almost impossible for Nigerians to totally do away with their big cars and SUVs which are renowned for higher fuel consumption. It is the classical case of choosing between the devil and the deep blue sea.

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Today, Vanguard offers you some tips on how to ensure maximum fuel economy in your vehicles at a time like this. It is clear that by improving your car’s fuel economy, you’re helping to reduce the drain on your wallet. With some simple driving tips and habits, your fuel can take you further. A combination of good driving habits, and proper vehicle maintenance of your car is essential.

The Tips

*When driving, accelerate and brake gently, quick starts and stops waste fuel, but smooth driving boosts your kilometres per litre. Driving at slower speeds leads to better fuel efficiency.

Reducing speed by 10-20 kph can help. Keep a steady speed, you may use your cruise control on motorways because when you drive at a consistent speed, you save fuel.

•Watch the traffic ahead, it will help you predict what other drivers will do or intend to do. This helps you to avoid braking and speeding up.

•Also avoid idling your engine for long periods even when it is stationary as it wastes fuel. Switch off the engine if you need to stop for more than a minute.

•Also limit short journeys, and be aware that cold starts use more fuel.

•As a motorist, ensure that your tyres are appropriately gauged. Soft tyres cause drag and waste fuel. Check pressures often and inflate correctly.

Many drivers don’t know that proper inflation of their car tyres contributes significantly to the fuel economy. Under inflated tyres have a higher rolling resistance on the road. This means that your tyres generate more friction and rolling resistance and will increase fuel consumption.

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If your four tyres are underinflated by 10 psi, this could increase your fuel consumption by 10 per cent. Car manufactures always have the recommended tyre gauge inscribed on the drivers door frame. Gauge your tyre accordingly and reduce your fuel consumption.

•Correct wheel alignment is vital. It reduces tyre wear and drag. This also saves fuel.

•Many motorists carry all sorts of things in their boots which they hardly need and this adds to the weight of the car, this should be avoided. Note that every extra 50kg of load in your car increases fuel consumption by about two to three percent.

Some used cars from abroad come with a heavy bar attached to the rear for pulling boats and other heavy objects from where they have been imported which is hardly needed in this part of the world. It is advised that you remove them to avoid unnecessary weight.

Some people however believe that this serves as protection when another vehicle hits them from behind, unknown to them that they are paying more to fuel their cars. Lighten your load and remove extra weight from the car. Less weight means better fuel economy.

•Also, reduce drag by removing roof racks as they increase wind resistance which wastes fuel.

•Use your air-conditioning system. Driving with an air-conditioner has an advantage to fuel economy but most drivers think otherwise.

Apart from keeping the interior of your car clear of dust and ensuring the safety of the driver from attacks, it also saves fuel. Driving with windows down at a speed faster than 80km/h causes a lot of wind resistance and more fuel consumption. It is more fuel efficient to drive with your air-conditioner on.

•Maintain the right speed. Avoid over speeding and going slowly too.

While both have safety consequences, they also have an impact on your fuel consumption. It has been established that on highways, your engine works hard to overcome wind resistance.

This means that you will burn up to 15 per cent more fuel at 100km/h and 25 per cent more at 110km/h. On the other way round, if you drive at a speed slower than 50km/h your engine would drop to a lower gear thus using up more fuel. It is advised that driving between 50km/h and 90km/h gives optimal fuel efficiency.

•Many people accelerate their cars as if they are running at Formula 1 Race thereby wasting their fuel unknowingly. Avoid revving your accelerator to a high revolution per minute (RPM). Your engine uses less fuel when it is revolving slower at a lower RPM.

•It is also important to note that aggressive braking is not only a disadvantage to the brake pad but increases fuel consumption.

Slamming on the brakes increases fuel consumption as the car needs to accelerate again. Give a reasonable distance between you and the vehicle in front of you. If you have been driven by a pilot before, you would understand what it means to drive with caution.

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They are very cautious of the vehicles in front of them and avoid them from afar. I am sure that if we take count of professionals who hardly get involved in traffic accidents, the pilot would take the number spot.

•Avoid hard acceleration when moving your car from complete stop or climbing hills as it increases fuel consumption. Most people who drive vehicles with automatic transmission hardly know the advantage of one special feature in the car called cruise control.

If you are driving an automatic car, you can make use of cruise control to keep your speed constant. But if you are driving a manual car, maintain a higher gear when appropriate. This ensures that your engine goes through less revolutions per minute, RPM and ensures less fuel consumption.

•Driving in traffic causes higher fuel consumption. Stop-start traffic puts a lot of pressure on your engine and burns more fuel. Avoid peak traffic if possible. Turn off your engine when it is parked. As long as your engine is on, the fuel is burning. The choice is yours to keep the engine steaming when that car is not moving. It is your fuel that is burning which you can use to cover some kilometers.

•Regular servicing with quality engine oil is key to the longevity of your engine. If your engine is poorly maintained, it will lead to sludge and corrosion build-up which will prevent the engine from working smoothly. Regular maintenance is key.

•Follow your vehicle’s schedule, a healthy engine works better. A clean air filter lets the engine breathe freely. Good airflow improves fuel use. Use the right oil type to reduce friction and boost engine performance. When buying a new car, think about fuel efficiency. Pick a model that fits your needs. If your car has a fuel-saving mode, then use it.

How to lower fuel consumption of your car

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Nigeria dominating Africa spare parts market, says ASPAMDA boss

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Nigeria dominating Africa spare parts market, says ASPAMDA boss

Nigeria has become a strong force in Africa’s spare parts market, President of Auto Spare Parts and Machinery Dealers Association (ASPAMDA), Hon. Ngozi Emechebe, has said.
He however lamented the decline in auto spare parts manufacturing plants in the country.
He said Nigeria could be a global player in the auto parts production with the right investments in the sector.
The ASPAMDA president spoke at the opening of the ongoing Lagos Motor Fair/Autoparts Expo at the Federal Palace Hotel, Victoria Island.
He said, “We have taken over Angola, Ghana, Togo, Ivory Coast, Gambia, Senegal and many other markets and ASPAMDA is the place to visit.”
The Chinese government, he said, knows the impact of ASPAMDA to their companies; “so Nigeria should wake up. If we are serious, we will take over the world economy.”
He said Nigeria almost got to a point of assembling cars from spare parts produced locally at a time.
“At Nnewi, there were a lot of auto spare part manufacturing companies then. At a time we were about assembling vehicles before things crumbled but thank God, Innoson Motors is doing it again,“ he said.
The ASPAMDA boss showered encomium on President Bola Tinubu-led administration for making efforts to bring back activities in the sector.
He said, “With the way the country is going now, many companies are gradually starting production in the country again.”
Commending the organizers of the Lagos Motor Show for resilience in sustaining the expo over the years, Hon Ngozi said, “Mr Ifeanyi Agwu, the organiser of this expo deserves a thumb up for bringing spare parts makers from across the world to come and showcase their products to our members and Nigerian customers.”
According to him, before the commencement of the expo some years back, ASPANMDA members used to travel to Europe, Japan, Taiwan and other parts of the world in search of companies to do business with.
“But with the spare parts expo, the various parts makers have been brought to Nigeria under one roof to meet with our members and do thriving business,” he said.
This, he said, had saved his members the cost of flight, hotel accommodation, as well as time and eliminated stress arising from flying the long distance to meet with manufacturers.
He recalled that some years ago, his members used to travel to Taiwan to buy spare parts “but when the business started to flourish, and the products started gaining recognition, Taiwan shut their doors against us and raised the prices of goods which made us to turn to China”.
He prayed that one day, China too should close their doors to Nigeria and force us to develop our own products.
Emechebe predicted that Nigeria will take over the world spare parts market in the near future. I pray that “China should close their doors to us so that we can grow” he said.
The ASPAMDA boss also appealed to the Federal Government to look into the high taxes and duties being paid by Nigerian businessmen which he said are killing local manufacturers.
He said, “ It is cheaper to import finished products than to produce locally in Nigeria as most of the companies are relocating to neighbouring countries due to unfavourable business conditions like high taxes, duties, energy and other infrastructure,” he said.

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Three electric vehicles on display steal show at Lagos Motor Fair

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Three electric vehicles on display steal show at Lagos Motor Fair

Three automobile manufacturing companies are exhibiting full Electric Vehicles (EVs) under one roof at the Lagos Motor Fair taking place at the Federal Palace Hotel, Victoria Island.

The unprecedented display of EVs at any auto fair in Nigeria is an indication that the Federal Government’s crusade to shift focus to green cars to save the environment and high cost of fuel is striking the right cord.

Most people at the fair ground visited the EV display arena and were excited by the quality and versatility of the designs.

The three-day motor show/ auto parts exhibition which started on Wednesday is expected to end today (Friday).

So far, the fair has made a lot of difference with the exhibition of the electric vehicles, hybrid vehicles, motorbikes and CNG vehicles.

The Electric Vehicles look beautiful in different colours, all have Chinese origin and available in four and five seaters with superb finishing.

Leading the park is Taocars which displayed two models out of their three models available in Nigeria. The Large and Medium sized Sedans boast of array of features that are tempting to resist by prospective electric car buyers, according to a report by Vanguard.

Managing Director Taocars, Mr Moise Niu told Vanguard that their range of Electric Vehicles can cover several kilometers before recharge. He described the vehicles as trendy, rugged, durable and easy to maintain.

The Marketing Manager of the company Mr Ifeanyi Ugbuaja who was also on ground to explain the features of the vehicles said the Electric Vehicles are pocket-friendly and offers luxury at its peak, in addition to being noiseless.

Also on display were the Bestune models which come as mini vehicles but with amazing spacious interior and features. The model known as fourfold charm and also described as favorite choice is a three door mini car. The company said it is built for fun, safe for all, easy to drive with great look.

Bestune xiaoma is a product of FAW Automobile which is already a known name in the Nigeria truck vehicle segment.

However the Cynosure of all eyes at the fair is Benlg Electric Motorcycles which comes in different sizes and designs. The Electric motorbike which were displayed by Benlg Eletric Motorcycle Nigeria Ltd include the Tank, Anan, Boxer and outstanding. The company also builds Electric tricycles and has capacity to produce 10,000 Motorbikes monthly.

The Managing Director of the Company Mr Leon Nie who said that they were just starting production at their plant in Shagamu, explained that the company has the capacity to meet Nigeria’s motorbike needs.

“Our motorcycles are totally Electric and we want to settle for the production of two and three wheelers as Nigeria EV market is just starting.

Others are the Geely plug-in-hybrid electric vehicle being displayed by Icheta which looks more like a Luxury sedan with its smart interior.

Kia Motors is also displaying its GNG technology at the Motor fair with the CNG powered Rio Sedan.

The CNG vehicles are known for their environment friendly and fuel efficiency which is 50 percent less than petrol.

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