Mr. Udoka Abanobi, Head of Vitaparts Nigeria Limited, a division of Vitafoam Nigeria Plc, and Business Manager, spoke about the difficulties Nigerian automakers face. He emphasized that in order to lessen reliance on imports and promote innovation, local content creation and cooperation with foreign partners are essential. High running expenses, poor infrastructure, and competition from low-quality imports are the main obstacles. To maintain adherence to industry standards, Vitaparts invests in technology, enforces stringent quality controls, and collaborates closely with regulatory agencies.
Consumers are also informed by the corporation about the risks associated with utilizing inferior items. Owing to differential Tariffs and an oversupply of low-quality products, Vitaparts operates below its installed capacity. They are expanding into new areas, streamlining procedures, and broadening their product line in an effort to combat this. Mr. Abanobi called for the government to enact pro-business measures like Tax breaks, improved infrastructure, and tighter controls on the importation of inferior parts. Through policy assistance and the development of a collaborative database for regional manufacturers, he underscored the need of fostering a positive business environment.
Nigeria imports car parts worth roughly $3.3 billion per year.
Superior oil filters with a 20,000 KM lifespan are available from Vitaparts, which are intended to improve engine performance and longevity. Through cost-cutting strategies, supply chain optimization, and the investigation of alternate energy sources, they are able to sustain their profitability. Along with developing new environmentally friendly filters, future plans call for growing into West African regional markets and eventually being the area’s top supplier of vehicle parts. To promote business expansion and industry development, the company is open to forming alliances with distributors and wholesalers.
Because of its strong reliance on imports, Nigeria’s automobile industry faces enormous obstacles in addition to tremendous prospects. The overall value of imported used cars increased from ₦325.05 billion in 2022 to ₦1.063 trillion in 2023, a 226.4% increase. This increase in demand is a sign of the rising need for automobiles, which the local industry finds difficult to satisfy given its restricted ability to produce 14,000 units annually versus an annual demand of 720,000 vehicles. Furthermore, Nigeria imports car parts worth roughly $3.3 billion a year, most of which are inferior new and used parts.
Domestic producers find it challenging to compete with imported used parts.
This reliance on imports threatens the potential for local sector growth in addition to placing a burden on the balance of payments. Local manufacturers find it challenging to compete with imported, cheaper used parts, and this deters Investment in local production facilities. Similar issues are being addressed by other African nations, albeit with differing degrees of success. As an illustration, South Africa has developed a strong automotive strategy that incorporates Export and local production incentives, helping it grow into one of the continent’s principal hubs for the production of automobiles.
Additionally, Morocco has made its Automotive Industry more attractive to foreign direct investment by establishing favourable investment conditions. These incidents demonstrate how crucial it is to have a supporting legislative framework in order to promote regional investment and output. A multifaceted strategy is required to bolster the Nigerian automobile industry. This would entail improving and reintroducing the National Automotive Industry Development Plan (NAIDP), which had improved local assembly capacity in the past but had poor execution.
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To stop the influx of inferior cars and parts, this strategy should be used in conjunction with the stringent enforcement of import laws. To further increase customer access to locally assembled vehicles and parts, a credit buy program may be implemented. In order to realize the full potential of the sector, legislators must move quickly to put these reforms into place. To create a competitive and sustainable automotive sector in Nigeria, local stakeholders should be urged to work with prospective partners and investors.