Auto council targets production of 35,000 vehicles in 2016

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The National Automotive Design and Development Council (NADDC) says it will drive the local vehicle production capacity from the current 25,000 to 35,000 units by the end of 2016.

The council’s Director of Policy and Planning, Mr Luqman Mamudu
announced this in an interview with newsmen on Thursday in Abuja.

“Our emphasis this year is to drive local assembly capacities and
grow the market by restraining importation of used vehicles, which are undermining the industry.
“Our current operating capacity is about 25,000 units annually, but we hope to reach 35,000 before the end of the year.
“This may sound ambitious but we are encouraged by the attitude of the new leadership of the Nigeria Customs Service (NCS), which is no longer antagonistic,’’ he said.

Mamudu recently said that the implementation of the automotive policy suffered some setbacks due to the reluctance of the past NCS leadership to implement the new vehicle import tariff.

He said that some NCS officials had misunderstood the concessions granted to vehicle assemblers under the policy to mean revenue loss to the Federal Government.

According to him, the development discouraged some existing and potential investors from making further investment commitments.

Mamudu also said that the NADDC was planning to launch its low cost automotive credit purchase scheme this year.
“This depends on if we get proceeds of our vehicle import levies
which are now remitted to government fully, thanks again to the new customs leadership.

“We also will start off our local content programme by commissioning our automotive test centres in three locations in Nigeria.’’ Mamudu welcomed the plan to sell off Peugeot Automobile Nigeria (PAN) Limited to competent investors in vehicle manufacturing.

It would be recalled that the Asset Management Corporation of Nigeria (AMCON) on January 12 announced the decision to sell its 79.3 percent equity stake in PAN.
AMCON said that it acquired the stake four years ago after purchasing the company’s debt and converted some as equity.
According to the corporation, PAN has assets totaling N24.96 billion as at December 2014 and an equity of N11.98 billion.

The company is seeking investors with experience in automobile
manufacturing to buy into the stake.
Mamudu said that the sale of PAN to competent investors would greatly boost the country’s vehicle production capacity.
He explained that PAN’s facility in Kaduna remained the best
Completely Knocked Down vehicle assembly plant in the country.
He added that the sale of the company had remained urgent since the launch of the National Automotive Industry Development Plan (NAIDP) in 2013.
“I don’t know why it took AMCON this long to sell the company because we have long introduced a very serious potential investor to the corporation.
“Perhaps, AMCON wanted to build up the facility to be attractive
enough for investors before selling it.
“At the end of the day we can only guess, because if the plant was sold long ago, by now Nigeria would have been flooded with cars mostly built here at CKD level.
“All the erstwhile local component manufacturing plants would have also been resuscitated by now,’’ he said.
According to him, PAN has about 73 vehicle component manufacturers on its list, in addition to the most comprehensive world class paint system, all of which have been idle.
PAN Nigeria Limited was set up in 1972 as a joint venture between the Nigerian government and Peugeot France with an annual production of 90,000 cars in the 1980s.

But operations plunged and the company accumulated bad loans shortly after the government sold its stake via a privatisation to local core investors in 2006.
He said NADDC would encourage successful buyers of the company to concentrate on building low cost and high quality cars for Nigerians.
“Multi-models do not allow long production runs and therefore economies of scale. This is what we desire to drive down cost of vehicles,’’ he said. (NAN)

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