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Nigeria: The Next Auto Hub Of Africa According To A Study

According to a study by PricewaterhouseCoopers, Nigeria should become the next hub of the automobile in Africa by 2050. According to the results of the analysis conducted by the audit firm and analysis, structural reforms undertaken by the Government in effect had a positive impact on the sector. So that we can consider in the medium term the country to occupy a prominent place on the African continent.

“We expect a real increase of the fleet to more than 25 million vehicles, despite predictions of less vigorous growth between 5.4% and 4.6% in 2050. This trend will be driven by an increase of demand, driven by the increase in the number of active people and an important growth market, “said PricewaterhouseCoopers well. According to many estimates, Nigeria could also be the third most populous country in the world by 2050.

PwC also believes that the reforms undertaken by the Government of Nigeria will help develop the local mechanisms of production, assembly and sale of detached pieces.

In addition, in support of various scenarios of developments in economic growth, the firm considers the opportunity of obsolete vehicles should largely be eliminated between 2035 and 2045.

The local automobile production is certainly not new to Nigeria , but in recent years, major industrial costs of structural challenges (energy, transport) contributed to weakening the sector.

In July 2015, Honda has for its part launched a car assembly unit in the country, the site his primary car manufacturing plant on the continent.

The Japanese group already present in motorcycle production in Nigeria since the 80s, had indicated that its new production unit will assemble vehicles in its range Honda Accord with an annual capacity of 1000 cars.

Choosing to install a Honda assembly plant in Nigeria then joined the one announced by nearly a dozen automakers, since the imposition of a 35% tax on new cars imported into the country – plus 35% of customs duties – in force since July 2014.

Thus, as a reaction to such measures, Peugeot is committed in 2014 to restart the assembly of individuals for vehicles in Nigeria, an activity interrupted for several years at its site in Kaduna. In July 2015, Volkswagen announced it had started assembling vehicles of its Passat ranges Jetta CC in Nigeria, after having ceased all automobile production business for nearly 25 years.

In January 2015, the CEO of Renault, Carlos Ghosn, said for his part that Nigeria held “extraordinary potential”, comparing the country in Brazil, although it is still slightly less populated (170 million inhabitants the first, against 220 for the second).

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“The difference between the two automotive markets is currently abysmal: 3.2 million new cars sold in Brazil last year, against 50 000 only in Nigeria Even Iran (77 million), that is. less populated and under international sanctions, already buys 1 million new cars per year, “he had observed.

“At one point, the Nigerian market will take off, it is inevitable, but we do not know when, probably in the next 7-10 years”, had predicted Carlos Ghosn.

“Since it is unable to set a date of departure, what we do is to position our brands, to be ready when the time comes. This especially involves the establishment of assembly plants for large countries such as Nigeria, where Nissan already has an industrial location, where Renault is preparing to install one, “had he indicated. During the year 2015, Renault has signed a partnership with a local company to build a small assembly of implantation of 5000 cars per year.

But factories envisaged in promising countries such as Nigeria, Ghana, Angola and Kenya are locations in DKD [disassembled knocked down, reassembling disassembled vehicles] small production rate, given the low sales volumes. But Renault has never implemented such plants, whether in Africa or elsewhere. His lack of experience in the field, explains some of the difficulties faced by the diamond brand in Nigeria, where the project is now stopped.

“We need to review our industrial strategy and find a new partner Nigeria is the main pebble in our shoe in Africa, takeoff market has not lived up to our expectations. Despite its huge population only 40 thousand new cars it sold in 2015 said recently in Jeune Afrique, Bernard Cambier, responsible since September 2014 the regional directorate Africa – Middle East – India, based in Dubai.

Because Nigeria is not alone in the battle between the African countries to become an automobile hub in SSA.

Thus, its India’s Tata recently announced plans to increase its presence in Africa by establishing an assembly base in Kenya. The manufacturer BMW has recently indicated its willingness to strengthen its presence in South Africa, to make a basic conquest of the African market.

Morocco already has about him already a large pool of assembly and manufacturing of detached pieces, some European manufacturers, while Egypt is also a major base for several automakers.

Sources: Agence Ecofin, Jeune Afrique, Bloomberg

Elisabeth Studer – July 24, 2016 – www.leblogfinance.com

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Written by How Africa

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