‘There is no excuse for Nigeria to keep importing vehicles’
Ade Ogundeyin is the Managing Director, Proforce Limited, an organisation, which manufactures Armored Personal Courier (APC) at Ode Remo in Ogun State, and have started vehicle exportation into other African countries. In this interview with KINGSLEY JEREMIAH, he discusses the many challenges confronting the automotive sector in Nigeria, and offered solutions that will turn the country to a vehicle manufacturing hub.
It’s been about three years since the government implemented the automobile policy, what would be your assessment of the policy so far?
I think it has been successful so far. When you look at the automotive policy, it is a very good policy; it is well articulated and there is no doubt about that. A lot of the moribund companies have come alive because of the policy. But government needs to put in more effort on the implementation. What I mean is that government needs to encourage a situation whereby people can buy cars easily. There was a bit of that from commercials banks, but cars are now very expensive. Banks are now a bit sceptical so we need government to play its own part in that area. All over the world, hardly do you find people who pay hundred per cent before they own a vehicle. There is always a financing scheme that enables people to buy cars. I’m sure Nigerian Government is working on auto finance scheme. And I’m sure they should be able to come up with something very soon, because it is very important to the success of the policy.
Do you see the Government’s ‘buy made in Nigeria campaign’ to be successful in the automotive sector?
This government just started the campaign. Government needs to insist on it. The increase in the duty of brand new cars to 70 per cent, and commercial vehicles to 35 per cent, made imported cars to be more expensive. That is good. The right thing to do now is to ensure that made in Nigeria cars are of top quality, and can actually compete with the imported ones. Once that is done, then I don’t see any reason Nigerians would opt out of buying a made in Nigeria vehicle.
Are you saying that the vehicle currently assembled here don’t meet international quality?
They do, because when you look at the vehicles we produce, everything is certified to international standard right from the glass to the steel, to the tyres. What I’m trying to say is that the government needs to make sure that quality wise, these products are checked regularly. I don’t know why Nigeria still imports a lot of things. Nissan in Nigeria and other plants produce good cars. Proforce for example, produces armored vehicles of international standard. Most of our products are better when compared with imported products. It lasts longer because we understand the challenges in the market. So you realise that Proforce has been able to outshine a lot of companies that import APCs into the country. There is no excuse for Nigeria to keep importing vehicles; no reason why Nigeria should be importing these things. Imagine if the huge money spent on importation is put into the economy, it will generate employment, boost local content and create a multiplier effect. Manufacturing is the heartbeat of any economy, and if we do not inculcate that habit, the country will run into problems. Taking all our hard earned foreign exchange to import will continue to plunge us into problems. I’m not saying that most vehicles manufactured in Nigeria are hundred per cent perfect, but we are improving by the day. By patronising made-in-Nigeria products, you are encouraging us to keep on doing better, to keep on improving at what we are doing, and that’s what we keeps us going.
Looking at the industrialisation policy of the Federal Government, of which the auto policy is a part of, what really needs to change to make Nigeria an industrial hub for automotives?
All we need to do is to patronise made-in-Nigeria products. Once we patronise our products, local manufacturers are encouraged, the industry grows, unemployment problem is solved, and our revenue is boosted. From our factories alone, we are able to employ a lot of people, and we are setting up a glass manufacturing factory. A glass manufacturing factory will provide employment for quite a number of families. Imagine the number of families that are being fed from just the glass manufacturing companies.
A vehicle has about 2,500 components; imagine how many companies that are producing brake pads, fibre and the different parts of the vehicle imagine the type of integration we will have. The auto sector can sustain Nigeria economy.
What are the challenges confronting your organisation?
You see the major challenge actually is patronage. Once we have 100 per cent confidence in patronage, I can assure you that every other challenge can be addressed. We need volume and with that we can lower our cost. But when you are not getting much, what you realise is that your cost pushes you into so many challenges. The challenges will eventually make your price go up. And you realise that you will no longer be competitive. Even if you are exporting, by the time we export our vehicles, we’ll have to remain competitive, and if our cost of production is too high, then we’ll run into problems.
The sector has huge export potential in Africa, how can we leverage this?
The market is here in Nigeria. If we are supplying only Nigeria, I’m sure we’ll be busy throughout the year. When it comes to export, nobody is interested in buying a product when they can see that even your own government is not buying it. How do you convince them that your products are of good quality? We need to patronise made-in-Nigeria, and that makes it look attractive to everybody elsewhere.
Local content is said to be at zero per cent in the sector, how can we drive backward integration?
I don’t believe local content is almost at zero per cent. For example, we manufacture batteries in Nigeria, who buys batteries from Nigeria? In our case, the leather we use on the seats and other things are from Nigeria, they are not imported. There are quite a number of things you get from Nigeria. Even the screws, the bolts, the knots are made in Nigeria. So, I don’t believe it’s almost zero. There are quite a number of things you get locally. And we can still do more than that provided the patronage is there. Let me give you a typical example, look at the production of bullet proof glass, it’s a very interesting area to go into in the production of glass. If you look at it, nobody is doing it in the whole of West/East Africa, nobody is manufacturing bullet proof glass, and it is being imported, so you have a huge market waiting for you.
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