Aminu Jalal - South African Automotive Week

Report
The Nigerian Automotive
Industry Development Plan
BY
ENGR. AMINU JALAL, FNSE, FNIMechE, FNIM,
THE DIRECTOR-GENERAL
NATIONAL AUTOMOTIVE COUNCIL,
ABUJA. NIGERIA
AT THE
NIGERIAN AUTOMOTIVE SUMMIT
SOUTH AFRICAN AUTOMOTIVE WEEK
JOHANNESBURG, 14-17 OCTOBER 2014
NAC Presentation at Soth African Auto Week
Outline
 Facts about Nigeria
 The Nigerian Automotive Industry Development
Plan
 The Plan Implementation
 Local content Development
 Response to the Plan
 Conclusions
NAC Presentation at Soth African Auto Week
Map of Nigeria
NIGERIA AND
NEIGBOURING
COUNTRIES.
NAC Presentation at Soth African Auto Week
The Nigerian Economy:
Vital Indicators
GDP (2013): $510billion. Major contributors are:
-Agriculture: 21.97%;
-Industry: 25.64%
Crude Petroleum and Natural Gas: 14.4%
•
Manufacturing: 6.83%.
Mining and quarrying; construction: 4.41%
•
•
-Services: 51.89%
•
•
Telecoms & Information Services: 8.69%
Motion pics, music prod, etc.: 1.42%
Real GDP growth rate: about 7% annually for the last
decade.
Per capita GDP (2013): $2,700.
NAC Presentation at Soth African Auto Week
Natural Resources
Minerals
• Oil and natural gas, Tin, Columbite, Iron ore,
Coal, Limestone, Lead, Zinc.
Agricultural Products
• Cocoa, Palm oil, Yam, Cassava, Sorghum,
Millet, Corn, Rice, Livestock, Groundnuts,
Cotton, Gum Arabic.
NAC Presentation at Soth African Auto Week
Industry
Food and confectionary, Beer, Textile, Footwear,
Cement, Motor vehicle assembly/manufacture,
Bus body building, Automotive components,
Metal products, Lumber, Soaps and Detergents.
NAC Presentation at Soth African Auto Week
The Nigerian Automotive
Industry
B r i e f h i s t o ri c a l f a c t s :
-Some private companies started SKD
assembly in the 60s;
-By early 70s and 80s, the federal
government set up 2 car, and 4 light and
h e a v y c o m m e r c i a l v e hi c l e a s s e m b l y
p l a n t s , a s s e m b l i n g v e hi c l e s f r o m C K D
parts
- t h e s e w e r e a l l p r i v a ti s e d b y D e c e m b e r
2012.
NAC Presentation at Soth African Auto Week
The Nigerian Automotive
Industry, 1980-2006
S/n
Plant
Year Started
Ops
Products
Annual Capacity
1
Peugeot Nig. Ltd.
1975
Cars, Mini-buses
63,000
2
Volkswagen of Nig. Ltd. 1975
Car, Mini-buses
45,000
3
Leyland Nig. Ltd.
1980
Lt. Com*, MiniBuses
7,500
4
MB-Anammco
1980
Trucks, Buses
7,500
5
National Trucks
Manufacturers Ltd.
1980
Trucks, Buses,
Tractors
13,000
6
Steyr Nigeria Ltd.
1980
Trucks, Tractors,
Buses
13,000
7
GM Nigeria Ltd.
Lt. Com, Bus,
Trucks
7,500
8
SCOA Nig. Ltd.
Lt. Com, Bus,
Trucks
12,000
*Lt. Com = Light Commercial vehicles
NAC Presentation at Soth African Auto Week
The Nigerian Auto Industry in 2013
S/n
Plant
Products
1
ANAMMCO, Enugu
Trucks, Buses
5,000
2
GM Nig. Ltd., Lagos
Trucks, Buses
5,000
3
Innoson Vehicle Mfg. Co., Nnewi
Pick-ups, Buses, Trucks
4
Iron Products Industries (IPI), Lagos
Truck & Tanker Bodies, Buses
5
Leventis Motors Ltd., Ibadan
Trucks, Buses
5,000
6
Leyland-Busan Ltd.
Trucks, Buses
5,000
7
NTM Nig. Ltd., Kano
Trucks, Buses
5,000
8
PAN Nig. Ltd. Kaduna
Cars, Buses
9
Proforce Ltd.
Armoured Vans, Jeeps
10
Steyr Nig. Ltd., Bauchi
Trucks, Buses
11
VON Nigeria Ltd., Lagos
Cars, Lt. Com, SUV, Buses
12
Zahav Auto Co. Nig. Ltd. Lagos
Pick-up Trucks,
NAC Presentation at Soth African Auto Week
Annual
Capacity
10,000
400
25,000
420
5,000
39,000
5,000
Table 1. Import of Vehicles into
Nigeria (UNCTAD) in US$M.
Year
2007
Motor Vehicles for 427
transport of
goods, special
purpose
Motor Vehicles for 1,096
the transport of
persons
Total
1,523
NAC Presentation at Soth African Auto Week
2008 2009 2010
2011
2012
930
847
1,466
731
1,125
2,344
1,746
2,705
2,024
2,326
3,274
2,593
4,171
2,755
3,451
Reasons for the Collapse of the
Industry
• Lack of an Automotive Policy
• Low demand due to economic problems in
the 1980s and 90s
• Low Patronage by government and its
agencies
• Inconsistent and Insufficient protection
policy ;
NAC Presentation at Soth African Auto Week
The Prospects of the Automotive
Industry in Nigeria
Nigeria has the following advantages:
i. A growing middle class (40 million), and a
potential vehicle market of one million
vehicles annually.
i.
Annual spending on vehicles import is over
N550 billion (US$3.5 billion) and growing,
making it the number two user of foreign
exchange in 2012 after
Boilers,
machinery and appliances.
NAC Presentation at Soth African Auto Week
The Prospects of the Automotive
Industry in Nigeria
iii.
Nigeria has not bound its tariff on vehicles
at the WTO, except for ECOWAS and the
auto industry has been admitted into the
common tariff exclusion list.
iv. Regional Export potential into the West
and Central African market; and
v.
Availability of a large and trainable
workforce.
NAC Presentation at Soth African Auto Week
The Automotive Industry
Development Plan
The Auto Sector is a key component of the Nigerian
Industrial Revolution Plan (NIRP). The NIRP is a 5 year
programme developed by the Federal Ministry of
Industry, Trade, and Investments to diversify Nigeria’s
economy and revenues through industry and to
increase manufacturing’s contribution to GDP 7%
today, to 9% by 2015, and finally above 13% by 2017.
The Automotive Industry Development plan was
developed after extensive consultations with existing
local auto manufacturers, international OEMs, as well
as MDAs . Finally, FMITI had offsite sessions with other
countries that have successfully implemented
automotive development programmes
NAC Presentation at Soth African Auto Week
The Automotive Industry
Development Plan
The Plan has the following Elements:
(i) Industrial infrastructure
Automotive supplier parks and clusters are where
industries can share infrastructure, resources, information,
knowledge and technical expertise. There are already
three areas where the industry is located and where we
will develop the clusters: Lagos-Ogun, Anambra-Enugu
and Kaduna-Kano States.
(ii) Skills development:
(a)
OEMs and their Global suppliers have extensive
manpower development programmes, both local and
international. NAC will work with pioneer OEM investors to
fill
skills gaps in auto operations.
NAC Presentation at Soth African Auto Week
The Automotive Industry
Development Plan
(b) The Industrial Training Fund (ITF) is already
working with SENAI in Brazil to design auto training
centres similar to what they have in Brazil.
(c) The National Automotive Council (NAC) has
been putting in place foundational skills
development for the automotive industry for the
longer term. This includes the introduction of
degree programmes in automobile engineering in
Nigerian Universities and new curricula for
teaching automotive mechanics.
NAC Presentation at Soth African Auto Week
The Automotive Industry
Development Plan
(iii)
Standards
Safety and products standards are crucial to the
development of a viable automotive industry.
Specifically:
-Local
content
manufacturers
would
be
encouraged and assisted to produce good quality
items and obtain ISO 9001 QMS quality certification.
-Vehicles to be assembled would be required to
have homologation certificate issued by an
authorised agency in the country of origin pending
when we acquire homologation capabilities.
NAC Presentation at Soth African Auto Week
The Automotive Industry
Development Plan
-NAC, with the Standards Organization of Nigeria
(SON)
and
other
stakeholders,
and
have
developed/adopted 106 vehicle safety standards in
the last two years.
-NAC is building automotive component test centers
with a view to achieving vehicle homologation in
future.
-Finally, the Council has been in contact with the
states’ Motor Vehicle Administration Departments to
review and reform the vehicle inspection and
certification system.
NAC Presentation at Soth African Auto Week
The Automotive Industry
Development Plan
(iv) Investment Promotion
While the provision of appropriate tariff measures, patronage,
supplier parks, etc., will attract investors, a deliberate
campaign will be mounted to attract them. The following are
also prerequisites for investment in the automotive sector:
a) Policy consistency by government through legislation.
b)
Checking Smuggling: NAC is already working with
the Federal Road Safety Commission (FRSC) and the
Nigerian Customs Service (NCS) on this issue. Measures to
control vehicle smuggling through the control of vehicle
registration system is being worked out.
NAC Presentation at Soth African Auto Week
The Automotive Industry
Development Plan
 C)
Fiscal Measures: The incentives and support
measures required by the industry can be achieved
through appropriate fiscal measures and patronage.
The fiscal regime is designed as follows:
S/n Category
1. Capital equipment used
for Auto Assembly
2. Completely Knocked
Down Parts (CKD)
3. Semi Knocked Down
Parts (SKDI)
4. Semi Knocked Down
Parts (SKDII)
5. Fully Built Vehicles
(Within Auto program)
6. Fully Built Vehicles
(Outside Auto program)
NAC Presentation at Soth African Auto Week
Duty
0%
Levy
0%
0%
0%
5%
0%
10%
0%
35%
0%
35%
35%
Elements of the Automotive
Development Plan
(V) Market Development
The Nigerian vehicle market as it is can support an
indigenous automotive industry. The following will be
implemented to develop and sustain the market for
local automotive industry:
(a)
Affordable vehicles programme
(b)
Vehicle purchase scheme
(c)
Patronage by government and its agencies
NAC Presentation at Soth African Auto Week
Local Content Development
In early years, it is expected that most vehicle parts will
be imported, with Nigeria basically focused on
assembly. However, over time, specific parts will be
manufactured locally as Nigerian suppliers develop
key competencies.
The plan will facilitate local
content increases in the following vehicle parts:
 Welded parts (exhaust system, Seat frames),
 Elect Parts (batteries, trafficators, wiring harness),
 Plastic and Rubber Parts (tyres, tubes, fan blades,
seat foam, oil seals, hoses, radiator grills, etc),
 Radiator,
Cables, Filters, Brake pads/linings,
Windscreens, side glasses, fibre-glass parts, paints,
etc.
 Rubber products – (tyres)
NAC Presentation at Soth African Auto Week
Plan Implementation
 The plan objective is to have vehicle assembly
operations with increasing local content
incorporation. This may be achieved in the assembly
stages below. The transition from one stage to
another should not exceed 12 months. (i.e. a
maximum of 48 months from start of SKDII to CKD
operations (including 12 months set-up period)):
SKD 2 Phase I
• Vehicle cabin is
fully trimmed,
painted and
dashboard,
accessories
installed. Other
aggregates are
loose and
assembled on
assembly line.
SKD 2 Phase II
• Assembly starts
with Car/ truck
cabin body fully
painted and
glazed.
NAC Presentation at Soth African Auto Week
SKD 1
• Assembly starts
with Car body/
trucks cabin
unpainted.
CKD
• All materials
supplied loose
for final welding
and final
assembly
Response to the Auto Policy
 23 Companies have signed commitments with technical
partners to assemble cars/SUVs, mini-buses, pick-up trucks
buses and trucks.
 VON started the assembly of Nissan and Hyundai vehicles in
April and July 2014 respectively.
 PAN flagged-off Peugeot 301 assembly line on 1st July 2014.
 Dana Motors will start the assembly of Kia and Renault
vehicles before the end of this year.
 VW, Toyota, Ford and Tata Motors are conducting a feasibility
study on assembling vehicles in Nigeria.
NAC Presentation at Soth African Auto Week
Conclusion
 Nigeria presents an opportunity for the assembly
of vehicles and the manufacture of automotive
parts and components. The various challenges
that prevented its growth and development are
being addressed.
 We are now working on a local content policy.
 We hope to partner with all interested parties, in
particular the South African local content
manufacturers, to develop the automotive
industry for our mutual benefit.
NAC Presentation at Soth African Auto Week
 Thank you for your attention!
 [email protected][email protected]
 www.nac.org.ng
NAC Presentation at Soth African Auto Week

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