INNOSON Vehicle Manufacturing (IVM) has advocated for a procurement Act that mandates patronage of made-in-Nigeria vehicles by Nigerian government officials.
The Head of Director of Corporate Communications of the company, Cornel Nwigwe, who made the company’s position known in a monitored broadcast at ‘Arise Television Business Programme’ on Tuesday, November 7, said the patronage would create economic opportunities for other value chain players in the vehicle manufacturing sector.
“When an economy depends on foreign-made vehicles, it is exporting jobs and doesn’t help the economy. The automobile industry is the industry of all industries, and patronage of locally-made vehicles is not about helping Innoson but value chain players like battery, tyre, and plastic manufacturing firms,” he said.
He cited the example of the Japanese government, which supported the Toyota automobile industry with $800 million to subsidise Electric Vehicle Manufacturing (EVM).
” I think the government should not just harp on the policy of patronising locally-made vehicles but put its feet forward in supporting production so that the cars can be more affordable for an average Nigerian workforce.”
He expressed concern that Nigeria’s currency problems were affecting the company’s production line but urged the government to support vehicle auto-finance schemes with loan facilities at affordable interest rates.
“The government can support banks with funds to help average Nigeria key into automobile finance scheme. This way, you help the growth and sustainability of the automotive industry,” he added.
It would be noted that the automotive industry in Nigeria is one of the country’s most promising sectors due to its growing domestic market size. The large continental market offered by the African Continental Free Trade Area (AfCFTA) is likely to present an opportunity for the industry.
The Nigerian auto industry gained prominence in the 1970s and 1980s, with a production capacity of 149,000 units a year, but was constrained by the high cost of domestic production and weak demand amid economic problems, currency volatility, and the end of the commodity boom.
Today, despite having a vehicle market size of 1,150,000 for new and used cars and a growing middle class, the country is a net importer of mostly used vehicles, and domestic production has been declining. In 2021, imports of vehicles reached around $2.3 billion, with 60 per cent being passenger cars.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.