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It will take time to start gaining from the revised Auto Policy—Boyi, PAN MD

The Managing Director of Peugeot Automobile of Nigeria (PAN), Kaduna, Mr. Ibrahim Dutsinma Boyi has traced the fears of international auto investors in coming to Nigeria in numbers to fears of possible policy summersault.

Giving reasons on why Peugeot brand is still struggling to stamp its feet and control the massive auto market in Nigeria, he said “Many factors could be attributed to the loss of leadership of PAN in the market space, chief of which is government’s reversal of its auto industry development plan conceived and launched in the 1970s”.

According to him, “The policy, as part of the National Industrial Development Plan (NIDP), was aimed to create and develop local industrialisation, with auto industry as an anchor industry to consume products of the petrochemicals and steel industries, among others”.

He said at that time, “OEMs (Original Equipment Manufacturers) were encouraged to invest in auto plants, which saw the birth of Peugeot (PAN) in Kaduna, VWoN in Lagos, Leyland in Ibadan, Steyr in Bauchi, ANAMMCO (Mercedes trucks/buses) in Enugu and NTM (Fiat trucks) in Kano”.

“These auto plants flourished and provided the vehicle requirements for not just Nigeria, but also exports to West Africa. During the efficacy of the policy, government and Nigerians only patronised locally assembled products as prohibitive tariffs were imposed on imported vehicles, both used and new. The auto industry directly employed more than 200,000 workers directly in the plants. This did not include the thousands employed by local component parts manufacturers, dealerships and after-sales networks, logistics providers and clearing agents.

Continuing, Boyi recalled that “in mid 80s the government of the day embraced economic and free trade liberalisation policies, which meant removal of protection and withdrawal of incentives for local manufacturing in favour of imports”.

“With decaying and inadequate infrastructure in terms of electricity, rail, security and skilled manpower, local firms could not compete with imports from environments supported by their governments with efficient infrastructure.

“This was the beginning of the down-turn of not just the auto industry, but the whole manufacturing industry in Nigeria. Factories closed, jobs were lost in favour of importation and trading.

He noted that “PAN that had held the leadership position for passenger cars started to lose market share to the imported brands. All the auto plants set up in the 70s closed shop, except PAN that had remained resilient and operational till today”.

Giving more pathetic but grapghic details of the current state of the Peugeot plant in Kaduna, the government’s realisation of the damage the policy reversal had caused to the economy and the instability and un-sustainability of reliance on oil as the main driver of the economy certainly fuelled the re-introduction of the National Auto Industry Development Plan (NAIDP) in 2013. According to him, “This policy offered local auto plants like PAN, NTM, ANAMMCO, Innoson, Nnewi and VWoN, a new lease of life and created opportunities for new players to invest in Nigeria. The policy is also the reason why there was a rush of interest in the Nigerian auto industry by new investors and OEMs”

“With its infrastructure, experience and technical expertise, PAN quickly keyed into NAIDP and re-entered into new SKD (Semi-Knocked Down components) and CKD (Completely Knocked Down components) contracts with our technical partners, Peugeot France. In July 2014, the new and award winning Peugeot 301 model rolled off our plant in Kaduna. This was quickly followed up by the luxurious Peugeot 508.

However, Boyi argued that in order to PAN market recovery, we also embarked on key activities in re-energising our after-sales support and training and delivery of modern and latest auto maintenance and repairs skills to the technical staff of our network partners through our fully accredited training center.

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