FG Plans New Auto Industrial Park to Cut Costs, Boost Local Manufacturing

The Director General, National Automotive Design and Development Council (NADDC), Mr. Oluwemimo Osanipin, said plans were underway to establish a new auto industrial park.

Osanipin announced that efforts to boost local manufacturing of component spare parts in the country is very important as this remained a key foundation of the auto industry.

He decried the country’s annual spending of about $19 million on the importation of motorcycle spare parts alone within a year.

Osanipin dropped these hints while speaking during a media briefing with journalists in Abuja over the weekend, said the disbursement of the N20 billion Consumer Credit Fund will commence in January 2025.

The credit, according to him is designed to encourage the purchase of locally-assembled automobiles, adding that the council was also working to standardise products in the auto industry to enhance its competitiveness across the continent and globally.

DG NADDC said, “In most cases, most of these parts will be produced over there and shipped to us. Let’s first make sure that we are competitive.

“If we are competitive, our local manufacturer will be able to stand against it. And apart from this, part of the things we are working on is the standardisation of products in the auto industry.”

He disclosed that among other things, there are plans to revive moribund companies and incentivize them to increase production of tyres for two-wheeled automobiles to meet a minimum of 60 per cent of the country’s demand for tyres.

He also disclosed that it is engaging with relevant stakeholders on the production of automobile batteries locally.

The NADDC boss emphasized that  these measures would give Nigeria an advantage over other countries as the African Continental Free Trade Area (AfCFTA) agreement commences next year – and to avoid a situation whereby the country becomes a dumping ground for other countries.

In the DG NADDC words, “A lot of activities have started taking place in AfCFTA because Nigeria has started exporting goods to other countries.

“Nigeria is not number one in Africa. If we fail to take all the decisions we are taking now, it means Nigeria is going to be the target of these people. And they are going to bombard us with their own products because by the time the barrier to trade among African countries is removed because of AfCFTA, we will be at their mercy.”

Automotive parts, he said remained the bedrock of auto industry, noting that without it, the industry would collapse.

“Auto parts are the foundation of an auto industry and we have to lay that foundation for the industry to grow. So, when I came in, I focused on this.

“We need to start producing some of the parts we use. Not only because of the new vehicle assemblers or vehicle manufacturers, we need them, but because of after-sales.

“We need to start focusing on what parts we are using because you buy a vehicle once, but you maintain your vehicle over a long period,” he added.

He maintained that the country needed to determine those component spare parts that Nigeria has the comparative advantage to produce locally, stressing that it is already working with partners on the initiative.

Speaking on the proposed industrial park, he said the council has begun talks with partners to actualise the ambition.

“If we work on a new auto industrial park, why do we need that one? I’ve mentioned the other time that we have some people that operate in shallows. They have the expertise, but they don’t have the finance.

“They have the expertise, but they don’t have the equipment. They don’t have the facility. So, if we build this, we provide the facility, and we can bring everybody together in an industrial park.

“We provide the electricity, security, majority of it, and they are going to have shared facility. If we put it together, we are going to have only one conference room like this, which will be available for them, If you have about 300 manufacturers there, they will use, they will share the same facility. They will have the same content.

“So, which means they can be able to work there and then reduce their cost because they are going to share most of the facilities together. And if we do this, we are going to increase their capacity to produce,” he added.

Osanipin stated further, “We are going to reduce the cost of production, and we are going to make it easier for them to scale up. These are part of the programme we are putting in place to ensure that we meet the local component, and increase the local component input that we are using for our vehicles.

“We have seen areas where, for example, we needed about 500,000 air filters daily but we can only produce 100,000.

“If that is the case, it means we have to do something about having more company to produce it locally. So, why are we establishing this? Because we have to be sure. Any policy that we come up with must not be one that will have unintended effects on the people.

“If you cannot provide it locally, there are little things you can do to stop it from coming in. So that’s what we’ve done. We’ve established that especially motorcycles, a lot of plastic parts can be manufactured in Nigeria.”