Luqman Mamudu is the Managing Associate, Transtech Industrial Consulting and former director of coverage and strategic planning on the Nationwide Automotive Design and Growth Council (NADDC). On this interview with BENJAMIN ALADE, he shares insights into the automotive trade and its 2025 outlook.
Are you able to share your ideas on the trade in 2024 and expectations for 2025?The Nigeria 10-year Nationwide Automotive Trade Growth Programme (NAIDP) launched in 2014 has confronted vital challenges. Regardless of some progress, capability utilisation stays stunted at lower than 4 per cent. Nevertheless, I anticipate some traction this yr, contemplating authorities initiatives, technological disruptions and world commerce patterns.
The programme efficiently resurrected the sector from lower than 5 per cent capability within the mid-70s and early 80s put in and working capability of about 120,000 models every year to 480,000.
Sadly, utilisation capability has remained stunted through the years at lower than 4 per cent up to now as a result of the important features of the programme I earlier highlighted weren’t moderately attended to.
There was not a lot change in 2023 and 2024 however I anticipate some traction in 2025 contemplating sure actions taken by the federal government, the trajectory of know-how disruptions and adjustments in commerce patterns globally.
Are you able to elaborate on why capability utilisation is stalled?The NAIDP 2014-2024 noticed the revitalisation of outdated vegetation and the institution of funding pipelines by world authentic tools producers (OEMs) in Nigeria. These included Nissan, Hyundai, Kia, Honda, Mitsubishi, Renault, Ford, MAN Vans, Sinotruck, SHACKMAN, Tata, Foton, Yutong buses and native manufacturers like Innoson Motors Manufacturing (IVM), Jetvan and IPI. As spectacular as this listing is and the practically half 1,000,000 put in capability from a recorded $2.2 billion funding, solely about 4 per cent capability utilisation was recorded at peak utilisation in 2017 from the info I collected. I imagine there will likely be no vital change upward. This funding alternative stays on the bottom through the years, however we aren’t nurturing it. Gaps in coverage implementation, administrative bottlenecks, overseas change constraints and unabated used automobile imports have hindered progress.
How can the funding pipeline be nurtured?By addressing coverage gaps, reversing key coverage provisions, eliminating administrative bottlenecks and offering low-cost automotive asset acquisition funds. In 2023 and 2024 as in earlier years, used automobile imports have dominated Nigeria’s automotive market. This has restricted the dimensions of the locally-used automobile market and their manufacturing capability. I doubt that any nation aspiring to determine and develop the native automotive trade can succeed beneath these circumstances.
What alternatives do you see within the trade?The current administration appears desirous of rising demand for locally-assembled automobiles. The NADDC’s latest allocation of N20 billion for automotive asset acquisition is a welcome improvement. I anticipate the federal government to proceed to assist efforts geared toward assuaging transportation prices.
This fund was offered for within the NADDC Act as a useful resource for this function. It’s meant to be a important driver of and a recreation changer beneath NAIDP 2014-2024. I hope the brand new NAIDP will likely be adopted by the federal government this yr.
What are your ideas on electrical automobiles (EV) instead transport choice?EV adoption is a greater choice, for my part. I counsel that current and potential meeting vegetation undertake EV programmes of their operations. The federal government must also implement a coverage infrastructure programme to assist e-mobility.
CNG will definitely make a significant impression and should play a big position in Nigeria’s automotive trade improvement this yr, however EV adoption is a greater choice for my part. I counsel that alongside the CNG undertaking, current and potential meeting vegetation ought to be inspired to incorporate EV programmes of their operations to remodel the trade with a significant impression.
The e-mobility know-how affords extra alternatives to develop native content material by its very nature. The know-how is gaining fast world adoption and is way simpler to copy and develop in Nigeria. The elements might be counted off the finger in comparison with the hundreds of elements in inner combustion engine (ICE) methods by way of the proper coverage and partnership, a strong battery manufacturing hub might be established in Nigeria within the free commerce zones.
Battery is on the core of e-mobility. There are ongoing or imminent tariff face-offs amongst the large EV producers and so they could also be searching for various markets. Why not Nigeria?This yr, I anticipate client credit score to turn into considerable by way of authorities seed funding efforts. Different credit score assets will progressively be a part of, decreasing prices for automobile financing. The inspiration of e-mobility may additionally be established, supporting efforts to alleviate transportation prices.
