Follow Us on Google
By Moses Akaigwe
To earn the confidence of stakeholders and attract more original equipment manufacturers (OEMs) to the local industry, Nigeria needs to have in place a vibrant automotive policy that is progressive in content and is effectively implemented,
And the OEMs include one of the global auto industry leaders, Volkswagen, which has been absent in Nigeria for some years now owing to an interplay of factors the auto maker considered unfavourable to its local operations.
This was the view expressed by Mr. Dave Coffey, the Chief Executive Officer { CEO }, of the Association of African Association of Automotive Manufacturers (AAAM), in an interview last week.
The return of Volkswagen to Nigeria is expected to be one of the issues on the table when the German Chancellor, Olaf Scholz visits Nigeria in October to hold talks with President Bola Tinubu on economic partnership between the two countries.
The CEO of the continental auto manufacturers’ body described as very critical a legal framework to Nigeria’s auto policy – National Automotive Industry Development Plan (NAIDP), with specific provisions on vehicle standards among other contents.
Coffey, who was responding to a question on what Nigeria is expected to do for Volkswagen to return to the country, remarked, “OEMs remain very interested in Nigeria. We need certainty of policy that has been passed into law and effectively implemented; this includes the required vehicle, fuel and parts standards to support investments.”
Coffey also previewed Volkswagen’s market when the production of VW-badged vehicles resumes in Nigerian – in the same West African economic region (ECOWAS) where its plant located in Tema, near Accra, Ghana, commenced operations in March, 2023.
His remarks: “The OEMs will ultimately decide what is produced based on a country’s competitive advantage – regional collaboration and complementation is key to driving scale and competitiveness; it is most unlikely that the OEMs will produce the same model in two ECOWAS locations.
The technical partners of Volkswagen of Nigeria (with a manufacturing plant at Ojo area of Lagos), first quit the country in the 90s, leaving the then Deputy Managing Director, Dr. Pat Utomi in charge.
But, production was later halted as unfavourable economic atmosphere persisted, leading to the plant being dormant for years until the Federal Government divested its shares and sold the company to the Stallion Group in 2005 as part of the privatisation policy of the Obasanjo-Atiku regime.
With technical support from Volkswagen of Germany, Stallion Motors recommenced the assembly of the VW vehicles in 2015, taking advantage of the newly introduced NAIDP.
Unfortunately, despite an MoU signed with Volkswagen during the visit of the then German Chancellor, Angela Merkel in February, 2018, to Nigeria during which the auto maker committed to making the country a production hub, the technical partners withdrew again some years ago
However, this time, Volkswagen cited the much criticised decline of assent by the then President, Muhammadu Buhari, to the Auto Policy Bill passed by the National Assembly, as the major reason for pulling out of Nigeria.
Beyond the frustration expressed by Volkswagen, the refusal of President Buhari to provide a legal framework to the auto policy by assenting to the bill passed by the National Assembly, is still regarded as major setback for the NAIDP/
Volkswagen also disclosed that one of the reasons for stopping the production of vehicles in Nigeria was the effect of the poor quality fuels available in the country on the brand’s products, including impaired performance of the engines.
Meanwhile, a new Volkswagen assembly plant in Accra – the product of another MoU between Volkswagen and Ghana signed a day before the one with Nigeria during the visit of Angela Merkel to that country, has come on stream; producing cars for the Ghanaian market.
