The nation’s auto industry may be in for a strong boost from next year as PSA Peugeot Citroen has made public, new plans to start assembling cars in Nigeria by the first quarter of 2019.
The deal is coming via a joint venture with the Chairman of the Dangote Group, Aliko Dangote, and five state governments.
According to an adviser to the Governor of Kaduna, Jimi Lawal, told Reuters on Tuesday that the Joint Venture, Peugeot Automobile Nigeria Limited, located in Kaduna, would assemble 3,500 units in its first year and ramp up to about 10,000 units.
Lawal revealed that “The first vehicle should come out by the first quarter of next year. We are hoping that the factory will be completed by December. The land has been identified…We have advertised for a contractor that will build the factory”.
Continuing, he averred that whereas Dangote and the five northern states will hold a majority stake in the joint venture, Peugeot Citroen will own a 10 per cent stake in the local joint venture company and operate the plant.
The states include Kaduna, Jigawa, Kebbi, Katsina and Kano, which would provide off-take for cars built at the Kaduna plant.
Lawal said PAN would start with N3.5bn ($10m) of equity and working capital of about $5bn, adding that the company would raise additional capital.
While maintaining that “Negotiations are still ongoing,” Peugeot said it would build its 301 Sedan in small volumes at a plant operated by PAN, adding that the vehicles would be produced from semi-assembled kits of parts shipped from its plant in Spain.
The company also noted that Nigerian production of additional models such as the 308 compact and 508 might follow later.
Business Hilights recalls that Dangote, in alliance with two states and the Bank of Industry (BoI), had made a bid to acquire a majority stake in PAN after the Asset Management Corporation of Nigeria sought to sell some of the assets it bought in the wake of the banking crisis of 2009.
