Nigeria’s Local Vehicles Production Dropped In 2015
A new report by the Deloitte Africa’s Automotive Insights, which was published in April 2016, has revealed that the local production of vehicles in Nigeria dropped in 2015. The report said production dropped from 4,000 units in 2014 to 2, 500 units in 2015.
This came despite the efforts of the Nigerian Government to encourage local automobile production through the launch of the Nigeria Automotive Industry Development Plan (NAIDP) in 2014 and the subsequent hike in import tariffs for vehicles which has attracted the interest of leading international auto makers and has led to the resumption of small scale vehicle assembly plants in the country.
The report said: “In 2015, local assembly was only able to cover 10-15% of the new vehicle market. According to Bloomberg, Nigeria produced 4 000 vehicles in 2014. Representatives from the Lagos Chamber of Commerce and Industry put the total number of locally assembled vehicles at approximately 2, 500 units for 2015.
“A leading commercial vehicle assembler cautioned that even these figures of locally assembled vehicles are likely to be overstated. A number of assemblers either only assemble a very limited number of ‘test vehicles’, or overstate the degree of value added in the assembling process in order to gain access to benefits under the NAIDP, highlighting the need for clear measures that ensure adequate implementation of the policy.
“According to a senior representative of one of the automotive companies present in Nigeria, approximately 1 000 passenger vehicles were assembled in Nigeria in 2015 – an even more conservative estimate. Currently, 35 companies are licensed to produce by the Nigerian Automotive Council under the NAIDP. Despite the increased focus on the automotive industry, the sector’s contribution to Nigeria’s GDP remains low at 0.07% in Q2 2015.
“At present, the vehicles are assembled from imported SKD kits with a limited degree of local inputs-sourcing due to the lack of a reliable and adequate domestic supplier base. While current assembly figures are low, with Peugeot Automobile Nigeria recording the largest number of vehicles assembled in 2015 with 400 units, the automotive companies aim at increasing their annual output in order to capitalise on the long-term growth prospects of the Nigerian market.
“However, due to the current economic slowdown, expansion plans are likely to be delayed as reflected in the decline of employment levels in some of the assembly facilities.”
Why Adoption of Electric Motorcycles is Slow in Nigeria, Others—Report
By Adedapo Adesanya
A new report has shown that more than 90 per cent of electric motorcycles sold in sub-Saharan Africa are not built for African conditions as the continent battles infrastructural challenges.
The Charging Ahead – Accelerating e-mobility in Africa Report from the Powering Renewable Energy Opportunities (PREO) programme forecasts that electric motorcycles are set to be a dominant force in sub-Saharan Africa’s sustainable mobility transformation, but continued investment in start-ups tackling barriers across the value chain will be critical to maximising the full potential.
It was revealed that Sub-Saharan Africa, where Nigeria belongs, remains largely reliant on internal combustion engine (ICE) motorcycles for transportation and employment opportunities. Infrastructural challenges force underdeveloped regions to rely on two-wheeler vehicles.
The reliance on ICE motorcycles comes with relatively high running costs and long-term environmental implications from the use of fossil fuels.
The report showed that as concerns around fossil fuel-powered vehicles grow, opportunities for alternative solutions that will decrease carbon emissions remain, adding that the electric motorcycle sector presents a viable solution to the challenges caused by high-emitting, costly ICE vehicles.
The report outlines the market opportunity for e-motorcycles to become a driving force in the African e-mobility sector as, according to an analysis by Mordor Intelligence, the market for motorcycles in Africa was worth $3.65 billion in 2021 and is projected to grow to $5.07 billion by 2027.
However, to accelerate progress in the e-mobility sector and meet the demands of a rapidly expanding customer base for two-wheelers, there are a number of challenges that need to be addressed. These include improving the availability of durable hardware, reliable charging infrastructure, and access to high-quality battery solutions.
Also, poor grid infrastructure means baseline electricity access is not reliable enough to support renewable battery recharge networks, and the electricity supply is weak.
In addition, high-quality battery suppliers prioritise global buyers able to order at volume, which leaves small start-ups out of the picture.
Speaking on this, Mr Jon Lane, PREO Programme Director, comments: “Investing in e-motorcycles provides a path to more sustainable and equitable growth across African communities and addresses the urgent issue of climate change.
“Through our work with several start-ups, we have identified opportunities for a full ecosystem of solutions that address challenges across the value chain. We hope this report demonstrates the impressive progress being made by companies in the e-mobility sector and will act as a call for investors, policymakers, and partners to engage and collaborate to help meet the scale of the challenge.”
Lagos Stops 50% Discount on Transport Fares for BRT, Others
By Adedapo Adesanya
The Lagos state government has announced a full return to the price of all bus rapid transit (BRT), Standard, and FLM with effective from Saturday, April 1.
In a notice seen by Business Post on Tuesday, the Lagos Metropolitan Area Transport Authority (LAMATA) said it would be reverting all its regulated buses fare to a 100 per cent rate.
Lagos State Governor, Mr Babajide Olusola Sanwo-Olu, had on Wednesday, February 8, 2023, approved a 50 per cent slash in bus fares following the cash crunch brought about by the recent currency swap.
Now, following the supreme court and federal government’s pronouncements on the use of old notes alongside the new notes and return of stability to the system, “the 50 per cent rebate is hereby discontinued,” it said.
“Consequently, bus fares return to pre-50% slash rate effective Saturday, 1st April 2023,” the statement added.
The development was received with mild concerns from commuters and residents who said the move was political at best.
Recall that the Governor was declared the winner of Saturday, March 18, governorship election in the state after winning 19 of the 20 local government councils in the state, scoring 762,134 votes.
His closest rival, Mr Gbadebo Rhodes-Vivour of the Labour Party, scored 312,329 votes, while Mr Olajide Adediran of the Peoples Democratic Party (PDP) got 62,449 votes.
Volkswagen Opens New Vehicle Assembly Plant in Ghana
By Modupe Gbadeyanka
A new 5,000m² vehicle assembly facility located near the Port of Tema in Accra has been opened by Volkswagen as part of its commitment to the development of the automotive industry in Ghana.
Volkswagen was the first automotive company to be registered under the Ghana Automotive Development Programme (GADP), and this new investment strengthened the brand’s presence in the country and the region.
Recall that in August 2020, Volkswagen awarded an assembly contract to Universal Motors Limited (UML) as its licenced importer in the West African country.
But with this latest development, Volkswagen will take over the new vehicle assembly responsibility from UML, which assembled models such as Tiguan, Teramont, Passat, Polo, Amarok and T-Cross on behalf of Volkswagen using Semi-Knocked Down (SKD) assembly kits imported from South Africa.
“Ghana is an important market for our Sub-Saharan Africa expansion plans, especially in West Africa, where we have identified opportunities of developing a collaborative automotive industry hub amongst the countries in the region.
“The hub concept will ensure that each country with an automotive development policy or economic interest in the automotive industry has an important role to play in the supply value chain. We believe AfCFTA will be the catalyst which will unlock trade barriers and promote regional collaboration amongst the countries,” the Chairperson and Managing Director of Volkswagen Group South Africa, Ms Martina Biene, said.
“Volkswagen is fully committed to Ghana and in supporting its industrial transformation agenda despite the current economic challenges facing the country. We are here for the long haul.
“Our company believes in long-term investments which are nurtured through mutual relationships with like-minded partners.
“Ghana’s commitment to the development of its automotive industry is evident in the GADP, which is still the blueprint automotive policy in the region in terms of creating an enabling environment for the establishment of an automotive industry in Sub-Saharan Africa,” Ms Biene added.
Ghana is the fourth Volkswagen assembly location in Sub-Saharan Africa. The other locations are in South Africa, where Volkswagen has been manufacturing vehicles for over 72 years, as well as Kenya and Rwanda.
Volkswagen has a presence in 17 countries in Sub-Saharan Africa, where it sells passenger and commercial vehicles through licensed importers.
“As the last frontier for the global development of the automotive industry, Sub-Saharan Africa has become very important for the sustainability of Volkswagen. We are therefore accelerating our growth strategy on the continent by playing a pioneering and leading role in the development of the automotive industry,” commented Ms Biene.
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