Stakeholder hinges automotive success on value-chain production
The Group Managing Director/ Chief Executive Officer (CEO) of R. T. Briscoe Plc, Seyi Onajide, has identified content manufacturers as the key to unlocking the automotive industry in Nigeria.
Onajide, in a chat with journalists, in Lagos, said the role of content suppliers had for too long been taken for granted.
He said: “The local content suppliers must be in place, first, before you now talk of having car assembly plants. If they are not on the ground, then we are deceiving ourselves. We need to learn from our mistakes, and that is what we told the Industry Minister in 2014, when they came up with the auto policy, but he wouldn’t listen,” Onajide said.
He regretted that the government went ahead to implement the increase in tariff for new vehicles, and everything went up.
He noted that today, the used vehicles they were trying to avoid, had become the only alternative for the country as prices of new vehicles rose beyond the reach of average Nigerians.
The R. T. Briscoe CEO added that many of the stakeholders in the auto industry put their selfish interests above the industry’s collective interest during the formation of the nation’s auto policy.
“At the time we were brought in, decisions had already been made, and their minds were made up on the direction of the policy. In fairness to Minister Aganga, had contacted some stakeholders, and they didn’t deny it. What I saw then was that the few people I contacted saw it as a privilege to strategically position themselves, and have an advantage over others. Selfish interests were placed above the interests of the industry and the nation. It was when the policy document came out, and they were left out that they started crying foul.
“This thing follows a process. For instance, Toyota at one time was producing cars in Japan, but later decided to have an assembly plant in other regions. As a matter of fact, Toyota only gives out the concept, while the assembly plants source their components locally.
“South Africa produces for the African market because it has enough local component suppliers. I guess that was what Aganga saw—if South Africa is producing cars, why not Nigeria too? It is a good idea; nobody is contesting that. But do we have local content suppliers? Dunlop and Michelin, which should have been our suppliers of tyres, have moved out of Nigeria to neighbouring Ghana. A radiator company that used to be in Port Harcourt has gone under. We used to produce windscreen in Ibadan back then, same thing with Exide batteries,” Onajide said.
On what went wrong with the thriving auto industry in the 1970s and 80s, he said that adequate protection was not given to the assemblers.
“I believe there was not sufficient protection for the pioneer assembly plants. Nigeria’s average tariff was the lowest among all countries that adopted automotive policy, as a strategy to develop their industry, at the time most emerging economies did. The adoption of free trade policy by Nigeria in the early 80s without the need to protect the critical industrial sectors finally undermined the industry,” Onajide said.
He said lack of integrated plans to develop local content was one of the reasons for the failure of the automotive industry in the past.
“Back in the 1970s, we had Peugeot Automobile Nigeria, Kaduna; Volkswagen Nigeria, Lagos; and Anambra Motor Manufacturing Company (ANAMCO), Enugu; Styer Nigeria, Bauchi; National Truck Manufacturer, Kano; and Leyland Nigeria, Ibadan. These companies were, however, privatised in 2007. But the assembly plants could not survive the harsh economic environment, orchestrated by many factors, so they collapsed,” he said.