Nigeria will soon start exporting new cars — Jalal

Jalal

Director-General of the National Automotive Council, Mr. Aminu Jalal, speaks on the new National Automotive Policy and how it will affect the industry, in this interview with RASHEED BISIRIYU

Did you involve the local auto companies and other stakeholders in the new auto policy formulation?
We met with some of them. For instance, we talked to Toyota and some others; not all, but all the members of the Nigeria Automobile Manufacturers Association were involved. We concentrated on local assemblers and importers who are interested in investing in Nigeria. We are trying to make it easier to manufacture than to import. Even the BMW people came from Germany and we met at the Coscharis (office) in Lagos.


There are fears that government may not have the political will to implement the new auto policy. What is being done to allay the fears?
We are pursuing the appropriate circulars to implement this policy. Any policy not backed by circulars will not be difficult to implement. We are also working with some stakeholders. We have already met with the Federal Road Safety Corps and the Nigeria Customs Service. We shall be meeting with other agencies. The plan has many aspects such as skill development; infrastructural development; investment promotion; anti-smuggling measures and market development. We have clearly earmarked strategies to implement them.
We are working with some state governments to get more clusters. I just finished talking to the chairman of the Nnewi Chamber of Commerce and Industry. The board of NAC will be visiting Nnewi soon. You cannot talk about auto industry in Nigeria without Nnewi. When the OEMs come, the part manufacturers will be involved.

There was a similar circular in the past mandating all government agencies to buy locally assembled vehicles, but it did not work. What will be the difference with the new circular?
The difference is that the former circular was only for patronage. The vehicles people want to buy will be produced here. This policy is to attract those that will do vehicles to satisfy a wider demand. This plan was done in conjunction with local auto industry players and those who want to come and invest. In the past, the choice was restricted. We know it takes time to do production, Nissan has already indicated interest to start production, they have been working but they didn’t want to commit anything until this policy is out. We need at least six months to start production.

Apart from Nissan and Toyota, do you have enquiries from other auto makers?
Yes, we had a lot of enquiries from Chinese manufacturers but when they saw the tariff, they backed out. With the new policy, the European Union and the Japanese Embassy are asking for details of this. Other countries have also made enquiries. Until the policy starts to be implemented, we will have more interests, because we have the market and the value of the auto market is about N550bn annually.

Will the policy not increase the spate of car smuggling?
A vehicle is not what you eat; you have to register a vehicle before use. Registration offices are supposed to make returns to the Customs for them to check if the owners have paid duties. But the state licensing authorities are not making returns to the Customs. The Federal Road Safety Corps has a website now where the Vehicle Identification Numbers of vehicles are reflected. Once you want to do a proper registration, you have to pay duty, normally when a car is new, you are allowed a certain period before you register. Except in the rural areas where some people use vehicles without registration, people generally register their vehicles. What we are saying is that no system is foolproof, but it will help to check smuggling.

What will be the tariff differential for imported vehicles since there will be no ban? 
If you bring in used vehicle, the Customs says it will use the price of the new car and depreciate it by 10 per cent per annum. We are still fine-tuning the details in the new circular.

Will the problems of power supply and inadequate market for mass-produced vehicles not derail the project?
We have the market. A car assembly plant will begin to break even with 5,000 to 7,000 units. We are working on allowing the car companies to assemble some models and import some. If you are assembling in Nigeria, you have the concession to import other models based on concessionary duties. Our thinking is that the concession we are giving them will help to cushion the effect of infrastructure.

Is exportation of cars assembled in Nigeria part of the new auto policy?
Innoson is already selling in Ghana. We are looking at exporting to neighbouring countries.

How soon will the people have the Nigerian car?

We cannot re-invent the wheel. We have to start with local assembly and build the local content. Anyone that achieves 60 to 70 per cent local content becomes the Nigerian car. This is what has been happening in different parts of the world.

The second thing we can do is, after getting expertise from them, our engineers can pull out and begin to design the Nigerian car. That was what India and China did. It is better to get these OEMs here, learn from them and design whatever you like. It is better we learn from people who have been doing it for over 100 years.
What has happened to the NAC levy collected on imported vehicles over the years and how much of the fund has been disbursed?
In 2006, the government wanted to scrap some levies, Sugar levy, Education tax levy and NAC levy. Some people were complaining. Some local assemblers complained that the NAC levy should not include local assemblers, and instead of government exempting the local assemblers, they sent a memo to the National Assembly to scrap the levy. NAC levy was scrapped because we did not go to the National Assembly to defend it. So far, we have given 31 companies about N10bn from the NAC Fund being managed by Bank of Industries. BOI is doing a good work in managing the Fund. There is a new levy to ensure the development of the sector. We want to ensure that vehicles manufactured in Nigeria are cheaper than imported.

Source: Punch