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FG revives 14 assembly plants

By News Express on 21/10/2015

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Mr. Aminu Jalal, the Director-General of the National Automotive Design and Development Council (NADDC), on Tuesday said 14 assembly plants, which existed before the automotive policy, have been revived.

Jalal stated this in Lagos at a stakeholders meeting of the Committee on Implementation of the Nigerian Auto Policy.

He said the policy objective of bringing back the automobile assembly plants had been achieved.

The director-general said that new entrants in the automobile business were also doing well, adding that the council had suspended the issuance of new assembly plant licences.

Jalal said there were plans to partner with a bank to run a vehicle financing scheme to enable Nigerians buy made-in-Nigeria vehicles with ease.

He, however, expressed concern at the huge cost of operating a vehicle assembly plant, saying that the investment stages had been broken down into three.

“The reason why we break the assembly operations into three is that a new vehicle assembly plant is quite expensive to set up.

“If you are setting it up, the minimum you can do will cost you over $50 million (N11 billion) for about 10,000 units per year.

“After about a year, they start with SKD 2 (Semi-Knocked Down), which is a painted body, bringing in the internal and external fittings.

“Then you move to SKD1 where you have a body that is not painted, you have to paint it and so on.

“Then you move to CKD 1 (Completely- Knocked-Down) when you have to weld all the pieces together, paint and do the assembly.

“That is a transition in 12 months to the next phase.”

Jalal, however, said that Innoson Motors had already started doing CKD.

He said Ashok-Leyland buses were CKD while Peugeot Automobile Nigeria (PAN) already had the full complement of investment in CKD and would start CKD in 2016.

Mr. Tokunbo Aromolaran, the Managing Director, Volkswagen of Nigeria Automobiles and Chairman, Nigerian Automobile Manufacturers Association, said it was best for Nigeria to make a start in automobile manufacturing.

He said investment in the industry was expensive in terms of funds and technological needs, adding that Nigeria had done well in building capacity.

“The automobile manufacturing process is capital intensive and a technologically- advanced one.

“You have to start from some point. We would never have been able to start if we did not start in a systematic and segmented way.

“We have taken the first baby step which is establishing the assembly plant.

“There is a lot of technology that is still required to get to the utmost but we would never get there if we never start.”

He said that for Nigeria to derive the benefit of automobile policy, automobile companies should start manufacturing components.

Aromolaran said the automotive policy would enable Nigerian companies to produce vehicles as done in other parts of world and create jobs for the unemployed.

Mr. Cosmas Maduka, the President of Coscharis Motors, said Nigeria had done well by keying into the programme.

He said the gains might be long-term considering the level of patronage and the foreign exchange that would be saved when vehicles were produced locally.

The industrialist urged Nigerians to be patient with the automobile development plan, adding that it would benefit the nation’s economy with time. (NAN)

•Photo shows Peugeot automobile.

Source News Express

Posted 21/10/2015 04:03:44 AM

 

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