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Peugeot to Complete Nigerian Assembly Plant December

By Dipo Olowookere

All things being equal, the proposed Nigerian assembly plant of renowned automaker, Peugeot, should be completed by December 2018.

This is to meet up with the target of producing its first assembled vehicle in Nigeria by the first quarter of next year.

PSA Peugeot Citroen is planning to assemble about 3,500 units in its first year and ramp up to about 10,000 units during the period.

The Peugeot brand used to be the preferred in Nigeria many years ago because of its ruggedness and durability. However, as the purchasing power of citizens continue to wean, the hunger for brand new vehicle dried up gradually as a result for request for imported used vehicles, which were cheaper.

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But Africa’s richest man, Mr Aliko Dangote, is making efforts to bring Peugeot back into the Nigerian roads.

To make this happen, he went into partnership with Peugeot Automobile Nigeria (PAN) Ltd and five states in the northern part of the country.

Mr Dangote will hold a majority stake in the joint venture, while Peugeot Citroen will own a 10 percent stake in the local joint venture company and operate the plant.

The northern states which include Jigawa, Kebbi, Katsina and Kano would provide off-take for cars built at the Kaduna plant.

The Peugeot factory is expected to commence operations before the end of March 2019 in Kaduna State.

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In an interview with Reuters, an aide to Governor Nasir El-Rufai of Kaduna State, Mr Jimi Lawal, disclosed 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,” he added.

Peugeot has said it would build its 301 sedan in small volumes at a plant operated by PAN. The vehicles will be produced from semi-assembled kits of parts shipped from Peugeot’s plant in Spain.

Nigerian production of additional models such as the 308 compact and 508 may follow later, Peugeot has said.

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“Negotiations are still ongoing,” Peugeot said, without providing details.

Mr Dangote, in alliance with two states and the Bank of Industry (BOI), made a bid to acquire a majority stake in PAN after the state-bad bank AMCON sought to sell some of the assets it bought in the wake of the banking crisis in 2009.

Mr Lawal said PAN would start with N3.5 billion ($10 million) of equity and working capital of about $5 million. He said the company would raise additional capital.

Mr Dangote and the state governors have visited France to sign agreements, said Lawal who added that Peugeot would assemble three brands in Nigeria and target West African markets for export.

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Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

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