How to Make the Automobile Industry Work Better – Council

By Daniels Ekugo

To gain investors’ confidence, the National Automotive Design and Development Council (NADDC) has advised that the policy establishing the Nigerian Automotive Industry Development Plan (NAIDP) be passed into law.

Director General of NADDC, Jelani Aliyu who gave the advice yesterday at the 2018 Nigeria Auto Journalists Association (NAJA) Annual Training Workshop in Lagos said that although, additional effort was made to legislate the policy and it passed both houses successfully in the last and current regimes, more still needs to be done.

Speaking on the topic “Achieving 2013-2020 Nigerian Automotive Industry Development Plan (NAIDP) Under The Current Regime: How Feasible?”, Aliyu said that the Economic Community for West African States (ECOWAS) has admitted automotive industry for consideration as one of its priority development sectors.

Emphasising on the importance of legal support, Aliyu who was represented by NADDC Director of Special Duties, David Oyetunji said Original Equipment Manufacturers (OEMs) came from South Africa to meet with the National Assembly and Vice President and implored Mr. President to put ascent on the bill as it was considered a key factor for them to establish their plants in Nigeria.

Apart from the legal aspect, other challenges the NAIDP is facing include difficult process of certification of bonafide motor vehicle assemblers/manufacture; the programs to precede the imposition of 35% levy on USED vehicle which can potentially undermine investment have not been realized because of investors fear of policy reversal and delays in the integration with Nigeria Customs Service to obtain VIN records and the outstanding full Buy-in of the Nigeria Customs Service due to misunderstanding of policy intent and perceived conflict with revenue collection.

For NAIDP to make further progress, Aliyu said “Nigeria Customs Service should collaborate with NADDC fully. Misunderstanding of policy intent and perceived conflict with revenue collection. Nigeria Customs Service should collaborate with NADDC fully. The policy has not been signed into law by Mr. President whose approval is most deserved and the problem of smuggling of used vehicles from neighbouring countries has not been fully curtailed”.

According to the DG, the NAIDP has inbuilt support programs to realize set targets in output, standards and skills, some of which include collaboration of NADDC with the Standards Organization of Nigeria (SON) in establishment of world class automotive test laboratories for emission, components and materials.

In addition, Aliyu said that on the directive of NADDC, the Standards Organization of Nigeria (SON), has planned to start implementing SONCAP on imported vehicles by requiring that all used vehicles imported into Nigeria have a road worthiness certificate from their country of origin.

To develop the automotive market further, Aliyu stated that all assemblers have been directed to include a low-cost vehicle in the models they roll out to enhance ease of ownership by Nigerians, adding that so far, Nissan, Hyundai, KIA, Volkswagen and others have all assembled brand new lower cost vehicles.

Speaking further, the NADDC boss said that “NAIDP provides for a credit purchase scheme to ensure that funds are available cheaply, as loans to civil servants, haulage and passenger commercial companies and the public that patronize made in Nigeria Vehicles. Council has accordingly applied to the CBN for the proposed entity operating licensee and concessions to attract additional funding from Development Finance Institutions”.

“The 35% levy on used vehicles under NAIDP have been suspended until the successful launch of the low-cost Vehicle Credit Purchase Scheme and the establishment of safeguard against anticipated smuggling and diversion of goods to neighboring ports. Nigerians buy used vehicles largely because they are cheap but most no longer have engineering integrity and pose safety and environmental hazard. Money used by Nigerians to buy used vehicles can be made as down payments for new cars assembled locally. The rest will be staggered over a comfortable period”.

On patronage, he advised that government should form the habit of using vehicles made in Nigeria as that would show government’s commitment to job creation and industrialization besides setting example for others to follow.

“Office of the Secretary to the Government of the Federation had issued a circular to this effect and Bureau of Public Procurement has commenced implementation in conjunction with the NADDC”, Aliyu informed.