• Volkswagen, AAAM

By Moses Akaigwe

One of the world’s biggest automakers, Volkswagen, has reiterated its readiness to commence long-term investments in Nigeria’s automotive industry, if the country’s Auto Policy gets legal support and is vigorously implemented.

 

 

The Managing Director of Volkswagen Group Africa (VWGA), Martina Biene, gave the assurance at an international  media event in Kigali, Rwanda, where AAAM, the umbrella association of vehicle manufacturers in Africa, also argued that an auto policy with legal support will be an incentive to investors in Nigeria’s auto sector.

Serious investors, Biene and Victoria Backhaus-Jerling, Chief Executive Officer of AAAM, explained, like to be assured through a policy backed by law that their investments are safe.

The VWGA MD noted that the National Automotive Design and Development Council (NADDC), under the leadership of the Director-General, Oluwemimo Joseph Osanipin, is ready with a good draft policy as contained in the Nigerian Automotive Industry Development Plan (NAIDP), 2023-2033.

According to her, what Volkswagen, other original equipment manufacturers (OEM) and related investors like component manufacturers are eagerly waiting for is for the document to go through a legal process and be signed into law.

Biene was responding to a question by the participant from The Sun Nigeria on what Volkswagen would like to see in place in order to return to the country after being made to leave by, among other unfavourable factors, the refusal of the then President Muhammadu Buhari to assent to the bill passed by the National Assembly.

Besides the unwillingness of the former President to give assent to, and implement, the previous policy passed by the legislators, other reasons given by Volkswagen for pulling out of Nigeria some years ago were poor fuel quality available in the country and the cases of its cars being tampered with  at the ports.

But Biene stated at the event in Kigali that the passing of the NAIDP 2023-2033 into law is enough to make the automaker return to Nigeria while hoping that the other issues would be sorted out with time.

She, however, disclosed that even when Volkswagen returns, there are some vehicles it would be unwilling to introduce into the Nigerian market to run on the type of fuel available at the filling stations.

“We (Volkswagen) very much want to come back to Nigeria,” Biene told the gathering of auto journalists from 13 sub-Saharan African countries that attended the media event organised by Volkswagen in collaboration with AAAM in Rwanda.

She spoke further on what the government of Nigeria is expected to do for Volkswagen to return: “Nigeria has already crafted a very good auto policy. If I have to prioritise, it will be that this policy is passed into law. That will be my key priority.”

Biene, who is also the MD of Volkswagen South Africa and AAAM President, explained that Volkswagen is being careful to ensure that the atmosphere is conducive for the kind of sustained investments it has in its plans for Nigeria (and other African countries) ahead of the anticipated come-back.

“And really, the thing is that we don’t want to get in and out again, and in again and out again, and then in again. We are geared up for long term investments,”

She hinted  of Volkswagen’s desire to jointly (with other OEMs)  grow Nigeria’s new car market which she described as “shocking” at less than 18,000 –  considering the country’s huge population of about 220 million people

Both Biene and Backhaus-Jerling spoke on the huge potentials in Nigeria’s auto industry, including installed, but unutilised  capacities in the various assembly plants, and advised that only a vigorous implementation of a policy passed into law can restore activities to the dormant facilities.

They also observed that component manufacturers are equally waiting for an effective implementation of the auto policy to usher in  new OEMs and catalyse production in the existing plants.

To reinforce her point, Backhaus-Jerling recalled her experience during a tour of some of the facilities in 2024, saying, “It is  very sad that if you are in Nigeria, you will see massive auto plants and nothing is happening inside…

“We really got a good overview of the industry and what is there. And there is so much potentials. Component manufacturing is just starting again expecting the policy to kick in and waiting for the OEMs to come back.

“But for us at AAAM, the important thing is seeing an effective policy being implemented. That is why we are  working together with the NADDC.”

Unfortunately, while Nigeria continues to dither over the NAIDP, countries with less potentials have continued to benefit from Volkswagen’s ambitious long-term investment programmes, even as countries like Ghana and Rwanda have commenced the assembly of VW vehicles.

No thanks to the absence of an auto policy with presidential assent, a memorandum of understanding signed between Nigeria and Volkswagen in 2018 by which the global automaker committed to making Nigeria an automotive hub in West Africa, is still a mere paperwork.

Presently, neither does Volkswagen sell its vehicles in Nigeria, nor does it have a dealer anywhere in the country.

However, industry observers believe that the return of Volkswagen to Nigeria is likely to happen sooner than later, because Osanipin assured recently that the NADDC in collaboration with the relevant ministry was working towards presenting NAIDP 2023-2033 to the National Assembly as an Executive Bill.

This will enhance its approval by the lawmakers and the likelihood of subsequent assent by President Bola Tinubu.