AUTO INDUSTRY

A delegation from the African Association of Automotive Manufacturers (AAAM), led by chairperson Jeff Nemeth, has visited the Nigerian capital, Abuja, with the aim of creating a framework for policy development that will support the growth of the Nigerian automotive industry.

Nemeth is also the CEO of the Ford Motor Company in sub-Saharan Africa.

The AAAM delegation’s programme included discussions with President Muhammadu Buhari, as well as government Ministers and representatives from Nigeria’s National Automotive Design and Development Council and the National Automotive Manufacturers Association.

The AAAM was inaugurated on November 25, 2015, by founding members BMW, Ford, General Motors, Nissan, Toyota and Volkswagen.

The AAAM’s mandate is to engage with government, industry bodies and representatives from the continent’s auto sector to provide advice on opportunities to formalise, develop and grow all aspects of the automotive industry.

This includes promoting an investor-friendly regulatory framework that will support the development and implementation of policies to establish a viable automotive manufacturing industry on the continent that includes both assemblers and suppliers.

“To unlock this market potential will require a greater government and private-sector partnership to develop a formal legislative environment that is conducive to longer-term growth,” explains Nemeth.

“[We] need a more robust automotive strategy that promotes a sustainable and stable environment in support of local manufacturing operations.

“One of the biggest challenges we face in Africa is the lack of reliable data on the number of new and second-hand vehicles sold on the continent, as very few countries have formal reporting or legislative structures to monitor the automotive sector.

“This is exacerbated by the large number of second-hand imports, with only a small proportion of new cars sold [owing] to the high import duties and lack of affordable financing options.”

Nigeria is recognised as a strategic automotives market, over the long term, owing to its large population.

Although Nigeria is recognised as one of Africa’s largest economies, the automotive sector is relatively small, with an estimated 44 vehicles per 1 000 inhabitants, as noted in Deloitte Africa’s ‘Automotive Insights’ report.

“This is far below the global average of 180 vehicles per 1 000 inhabitants, and lower than other developing regions, such as Latin America (176) and Asia, Oceania and the Middle East (79),” the report states.