Inspiring Solutions

• Regularly study and review the automotive parts components development industry in Nigeria;
• Evolve a local content programme specifying which component parts are to be continuously deleted from the imported Completely Knocked Down parts;
• Recommend incentive and protective measures to ensure compliance with approved local content programmes;
• Forecast the demand and supply patterns for various types of automotive vehicles produced in Nigeria and the basic raw materials requirements;
• Prevail on government to patronize local automotive industry to boost capacity utilisation through hire purchase scheme amongst others;
• Support plant/industry expansion and infrastructure needs through provision of soft loans;
• Establish a test centre for the certification of standards and quality assurance;
• Establish a specialised training, design and development and mass production centres;
• Engage in capacity building and up grading of manpower;
• Extend grants to support R & D activities in institutions; and
• Through its Ombudsmann Committee, to respond to public complaints on locally manufactured products or the activities of manufacturers.

Expectation from the Automotive Industry:

• Reciprocate government gesture by offering their products at realistic prices;
• Be true and honest enough to furnish NADDC with information on their operations;
• Integrate auto parts certified by the Standards Organisation of Nigeria in locally assembled products;
• Disclose specific technical details to components/parts manufacturers to enable them produce as appropriate;
• Pursue local content deletion programme; and
• Abide by all government rules and regulations.

The National Automotive Design and Development Council was set up primarily to initiate, recommend and supervise policies and programmes for locally manufactured vehicles and components.  The functions include the following:

1. Regularly study and review the automotive parts/ components development industry in Nigeria;
2. Evolve a local content programme specifying which component parts are to be continuously deleted from the imported Completely Knocked Down (CKD) parts;
3. Recommend incentive and protective measures for the development of the Nigerian automotive industry;
4. Appraise and recommend new models of vehicles envisaged for the Nigeria market to ensure model rationalisation;
5. Identify and classify the components and parts which can be standardised to ensure their interchangeability;
6. Regularly evaluate the pricing structure and quality of the products of the Assembly Plants as well as imported vehicles and parts to ensure international competitiveness;
7. Forecast the demand and supply patterns for various types of automotive vehicles produced in Nigeria and the basic raw materials requirements and equipment;
8. Encourage the development and production of raw materials such as sheet metal, alloys and special steel needed by the automotive industry;
9. Regularly review the penalties to be imposed for non-compliance with the guidelines and programmes specified by the Council;
10. Carry out inspection and other quality assurance activities in factories, ports and roads in pursuance of other objectives specified above;
11. Research, design, develop and test low cost vehicle prototypes;
12. Establish referral auto-test centres to provide technical support services to automotive sub-sector;
13. Liaise with the Association of Local Content Manufacturers of Nigeria, Manufacturers Association of Nigeria and other stakeholders to ensure that the existing installed capacities are fully utilised;
14. Draft and recommend standards for the automotive industry;
15. Develop programmes for the acquisition of technology for vehicles and components design, manufacture and assembly;
16. Implement the National Automotive Policy;
17. Develop and regularly review criteria for determining an automotive manufacturing plant;
18. Mandate vehicle-manufacturing companies that import more than 10,000 vehicles of any brand per annum to establish an assembly plant in Nigeria;
19. Monitor and ensure compliance with paragraph (r ) of this section by setting a procedure for enforcement under this Act; and
20. Perform such other functions as may be assigned it by the Minister from time to time.

NADDC mandate is to revitalize and grow the Nigeria automotive sector because of its multiplier effect on the economy.  Nigeria has all the critical elements to develop a sustainable automotive industry. It has a large domestic market to meet critical output and trainable manpower abound.

The Genesis of the Automotive Industry in Nigeria

The beginning of the automotive industry in Nigeria dates back to the 1950s when private companies pioneered the establishment of auto assembly plants, but became significant in the era of oil boom, as a result of  large inflow of income.

The Federal Government of Nigeria however, became involved in the industry between 1970-1980 when it entered into partnership with advanced countries such as Germany, America and Britain which led to the establishment of 2 passenger vehicle plants by (i) Peugeot Nigeria Ltd. (PAN), Kaduna (ii) Volkswagen of Nigeria Ltd. (VWON), and 4 Commercial Truck plants by (i) Anambra Motor Manufacturing Company (ANAMMCO), Enugu; (ii) Steyr Nigeria Ltd. Bauchi; (iii)National Truck Manufacturers (NTM), Kano; and (iv)Leyland Nigeria Ltd. Ibadan. These six assembly plants established by the Federal Government used Completely-Knocked-Down (CKD) kits, and had an installed capacity for producing over 100,000 vehicles annually by the 1980s with a provision for meeting a specific local contents.

Towards the end of 1980s the industry was negatively affected by a downturn in the economy, due to policy summersault and higher cost of locally assembled cars. By 2000, used foreign cars dominated the market in the country, the rise of which negatively impacted the development of backward integration in the industry. Thus in December 2012, the six assembly plants were privatized by the Federal Government.

Upon the approval of the Nigerian Industrial Revolution Plan (NIRP), The National Automotive Design and Development Council (NADDC) re-launched the National Automotive Industry Development Plan in 2014 as a critical component of the NIRP, basically to support and grow the local market, save needed forex, create jobs and drive local content in manufacture and technical expertise. The NAIDP approved in 2014 brought several dividends not limited to:  31 licenses granted for the production of cars, trucks and buses, unveiling of made-in-Nigeria Nissan Patrol SUV, unveiling of KONA Electric Vehicle and Compressed Natural Gas-powered Vehicles/Buses produced by local assembly plants.

The Nigeria Automotive Industry currently has an installed capacity to produce over 500,000 vehicles annually by local assembly plants which include A.G Leventis, Afri Ventures, Coscharis Group, Dana Motors, Iron Products Industries, Peugeot Automobile Nigeria (PAN) and Stallion Motors. Additionally Honda operates a fully owned subsidiary in the country to assemble its vehicles locally, while we have Innoson Motors (IVM) as one of the indigenous auto manufacturer in Nigeria.

Through the efforts of the National Automotive Design and Development Council (NADDC), the Federal Executive Council approved the new 2023 Auto Policy. The approved National Automotive Industry Development Plan (NAIDP) has embedded competitive yet protective fiscal and non-fiscal incentives needed by all relevant stakeholders such as automotive industry manufacturers/producers, investors, developers, etc. When applied, the fiscal and non-fiscal incentives is expected to boost local production of made-in-Nigeria vehicles, increase local content to about 40% and achieve the attainment of a 30% locally produced Electric Vehicles (EVs). The New NAIDP when implemented will generate 1 million jobs; enforce patronage of made-in-Nigeria vehicles by MDAs and other companies working on government contracts, boost Research and Development (R&D) and technology transfer.

The enforcement of its local content policy will bring about a complete turn-around in the following raw material industries: steel, aluminium, coper, plastics, rubber, paint, glass, electronics, textile, wood, etc. Further development is also expected in the following economic activities: dealership, finance and credit, logistics, advertising, repairs and maintenance, insurance, service parts, farm mechanization, agricultural produce transportation, EV charging stations, etc.

It is expected that with these implementations, challenges which adversely affected the industry capacities in production, patronage and utilization will be reduced significantly.