The ongoing Nigeria Automotive Industrial Development Plan (NAIDP) geared at stimulating the growth of local automotive assembly plants is generating interest, as Ford Motor Corporation of the US plans to expand its manufacturing plants in Africa, with searchlight on Nigeria.
Bill Ford Jnr, global chairman of Ford Motor Co, responding to BusinesssDay’s questions on the likelihood of setting up an assembly plant in Nigeria, at the unveiling of the new Ford Mustang, last week in Dubai, said the US automaker considers Nigeria a strategic market that is difficult to ignore by any serious global player, including Ford. Bill Ford further said: “For the Nigerian market, it is not a decision that Ford is going to take immediately, but we are currently engaged in genuine conversation with the Nigerian government and we are looking very closely at that market, to determine the best way for us to participate. “All I can tell you is that it would be probably possible to talk to you about the prospects of that (setting up assembly plant in Nigeria) happening in the near future, but we at Ford cannot say anything today”.
He added, “Everything is pointing toward a surge in the African economy and for large population size like Nigeria, we are not ruling out the possibility. We are really focused on this region like never before and this will form part of our expansion plans looking at industry wide sales forecast that will grow 40 percent by 2020. ” Corroborating what the FMC chairman, Jim Benintende , Ford’s president and CEO for Middle East and Africa, said: “It is going to be a rocky road for a bit of time, “But you’ve got to take the long-term view in places like Nigeria. It’s the biggest economy in Africa. You can’t ignore that. It’s got abundant natural resources, it’s got a burgeoning middle class. There’s a lot of real good reasons to look at Nigeria for future investment.” Benintende stated that the federal government must seriously re-order its priorities on industrial policy, infrastructural deficit, the country’s component parts supply and value chain, including the negative threats to locally assembled vehicles by the uncontrolled influx of grey imports and used vehicles coming to Nigeria.
Defining Africa’s vehicle market as accelerating rapidly, but a very difficult one, Jim Benintende said Ford projects that industry wide sales would grow to 2.1 million vehicles over the next six years, from 1.5 million in 2013. Africa’s driving-age population is projected to soar 55 percent to 840 million people by 2023, from 540 million last year, Ford has said. He said the African continent, with Nigeria accounting for the highest population size, remains a difficult place to do business, citing the Ebola virus outbreak in Liberia and Sierra Leone and civil unrest in Nigeria, where Boko Haram rebels have been causing instability in the polity.
Benintende, a Ford veteran, appointed to run the regional operation this year, is formulating an Africa growth strategy for Mark Fields, who took over as CEO July 1 after Alan Mulally retired. The plan is to increase Ford’s factories in Africa beyond its two plants in South Africa, with Nigeria being considered as an option, he said.
Commenting on the new optimism from Ford, Dabor Kpamana, a Diaspora Nigerian resident in Abu Dhabi, told our reporter that the coming of more players to set up local auto assembly plants would lead to the revival of local component manufacturers in areas such as automotive batteries, lubricants, windscreens, clutch cables, mudguards, wiper blades, brake pads, automobile paints, components for tyres, etc. Kpamana added that it would also bring about the possible creation of new spin-offs, encourage small and big foundries, as well as the nation’s iron and steel industry, and ultimately lead to the creation of thousands of jobs, many of them for several previously disengaged skilled workers.
BusinessDay had earlier reported that the proposed investments in assembly operations by top automobile dealerships in Nigeria, through their principal automakers were expected to push up the local manufacturing sector’s contribution to Gross Domestic Product (GDP). The implication, according to the report, was that motor vehicles and assembly’s current contribution of 0.8 percent to the manufacturing sector would increase significantly, going by the volume of ongoing and proposed investments in the sub-sector.
This would consequently push up the manufacturing sector’s current GDP contribution of 9 percent, which represents about $46 billion of Nigeria’s $510 billion GDP.
