•EV costly, needs FG’s intervention
By Moses Akaigwe
The ‘secret’ behind the speed at which Innoson Vehicle Manufacturing Company {IVM}, Innewi beat other brands to line up hundreds of locally manufactured compressed natural gas {CNG} buses for delivery to customers following the removal of fuel subsidy on May 29, has been revealed by the Chairman of Innoson Group himself.
Chief Innocent Chukwuma said in an interview at his auto plant in Nnewi recently, that long before the electioneering campaign {during which most of the Presidential candidates vowed to end subsidy} and even before the declaration by the President that subsidy had gone, he had known that high pump prices of petrol and diesel would shift demand to vehicles running on auto gas.
Chief Chwkwuma disclosed that he benefited from his own foresight, “My vehicle manufacturing factory is about 12 to 13 years old today. I diversified into producing CNG vehicles two years ago when I realised that someday soon, the fuel price would go up. I knew right from the beginning that the government must remove subsidy which would eventually increase the pump price of fuel.
“So I started planning by buying the necessary equipment. That was why I was able to produce so many units of buses immediately the fuel subsidy was removed by the government. If you go to places like Benin, 80 percent of the vehicles they are using are CNG-powered. They have tested CNG and it’s working very fine for them over there. So, I believe in the nearest future, all Nigerians will embrace CNG vehicles, because they are not just very affordable compared to diesel and petrol, but using them also leads to low maintenance costs.
“That was why I started the production in time. In fact, I started before everybody, and we are doing well. Now, we are converting petrol and diesel vehicles for people that are using our own {Innoson} vehicles. After some time, when our own vehicles have been covered, we can then start converting vehicles for people using other brands.“
The Innoson Group Chairman said he was sure the withdrawal of subsidy was going to raise the pump price of petrol so high that a lot of people would switch to CNG, which according to him, is cheaper and environmentally friendly.
“That was my own thinking before I started to build CNG vehucles. I knew it was the way forward, and that the government must eventually remove the subsidy on fuel. Today, they have done that. It was a big surprise to many that I started manufacturing the alternative CNG buses and cars even before the subsidy was removed. But, there is nothing there. It was just that I had the foresight to calculate what the fuel price would be in future; believing that when the pump price goes too high up, the alternative would be CNG vehicles.
“So, I went straight and started producing CNG vehicles. Now, I make vehicles that are able to use CNG and petrol or diesel: In some places, CNG is not available. In such situations, the alternative (petrol or diesel) can be serving them. When CNG is available everywhere, I will make all the Innoson vehicles engines to be CNG-powered only. For now, we are manufacturing engines that can run on CNG, petrol or diesel-powered, depending on availability. The price is also very cheap.
“The difference between CNG and the other types of fuel is very clear and far apart. So, today, following subsidy withdrawal, people no longer fuel their vehicles as they used to because of the harsh economic condition in the country. That is why I believe that if the government gives some kind of incentive to companies like Innoson, we can build CNG conversion centres everywhere in Nigeria, so that everybody can embrace CNG and enjoy the huge benefits.
So far, he is satisfied with the level patronage of IVM vehicles. “Many Nigerians are using my vehicles. We have a lot of our CNG vehicles in Edo state and other places, and they are happy with their performance. I am encouraged. People are giving us a lot of support. Many people are no longer ready to buy imported vehicles anymore, except Innoson vehicles. They believe that if they continue to buy Innoson vehicles, the company will employ more Nigerians and people will be more secure in their jobs. Even though ours are not perfect, they prefer using them with the anticipation that after with time, what is good will even be better. I believe our own is still good enough.
He said he was conscious of the need to use his manufacturing companies to keep the youths busy, and away from crime: “Sometimes when we want to procure certain equipment, we usually buy the manual {instead of the automated version} so as to employ more Nigerians to man them. It is not as if the automatic machines cannot work here, but we are conscious of the need to create jobs. I buy manually operated equipment so that more people can get involved in the production. There was a belt we were supposed to buy: We needed the automatic version, but we bought the manually operated one and that is the difference between my factory and others’.
“Instead of using some automatic equipment, we use people to do the job. I am interested in seeing that our people are employed and kept busy. Keeping the young ones busy helps the society and it is very important. If the youths are not busy, there will be problems. So, we are creating jobs to keep them busy. That is the way forward. “
Dr. Chukwuma reacted to the specific mention of 20-seater CNG buses in the broadcast by the President, saying “Any size of bus that Nigeria wants, we have the capacity to produce them here in Nnewi. We have the capacity to produce 120-seater, 20-seater or 10-seater bus models. The important thing is to give them what they want. We produce bus variants from seven- seater to 60-seater {the latter with provisions for standing passengers}. So, it all depends on what you want. We also produce cars, SUVs, and MPVs powered by CNG.”
He also spoke on the high cost of converting vehicles from consuming petrol or diesel to CNG: “Conversion is very high now and before the cost will come down, the government has to come. Before the cost will come down, there is need for an investment which requires government support. With such investment, the cost of the conversion of vehicles to CNG can be reduced to N300, 000.
“But, today because such investments are not yet on ground, the cost of conversion is too high. If the government can put certain support facilities in place, the cost of the conversion will be reduced to about N300,000. At Innoson, we have something to do to reduce it to that price, but it requires government’s support. Again, there are certain things we are supposed to produce here because we have the materials. If we produce them here, the conversion cost will be N300,000. Without producing these vital materials here, the conversion cost will be like N800,000. That investment is important.
He was also asked: What are you doing in terms of providing rechargeable facilities for Electric Vehicles?
His answer: “The solution to electric vehicles is the local production of the batteries here in Nigeria. Without producing the batteries locally, electric vehicles will remain expensive. First of all, we need investments in battery production. When we manufacture it here, the cost of electric vehicles will come down. Importing the batteries will make the vehicles expensive and nobody will like to put 50 percent of the vehicle cost to buy the battery alone. Instead, they will prefer to buy petrol or diesel-powered vehicles.
“Don’t forget that after four years, electric vehicles users will have to change the battery and buy a new one. Electric vehicles are good, but not yet for Africa, I don’t think it will go far for now. This is because when you buy an electric vehicle, a major component in the vehicle, like the battery, will no longer be usable after four years. The battery will die after four years, and most of them are like that.
“The solution is, therefore, local production of batteries. Producing the batteries in Nigeria will considerably reduce the price, so that even when it is to be replaced every four years, it won’t impose a huge financial burden on the owner.
“The best type of vehicle that suits the Nigerian situation today is the CNG. It will be better and cheaper when we produce the CNG {gas} bottles here. But if you import the bottles to use in manufacturing CNG vehicles, the price of the vehicle will be very high. When the gas bottles are imported, conversion from petrol/diesel to CNG will not be less than N800,000. But producing the bottles here in Nigeria will crash the conversion cost to N300,000. To set up such an investment is very expensive.
“That is why the government needs to look into this challenge with a view to providing incentives, so that people will be able to convert their vehicles at cheaper costs.”
And, his projection for the IVM brand in the next 10 years? “My projection is to see made-in-Nigeria Innoson brand of vehicles everywhere you go in Africa. It is a projection for Nigerians and not for Innoson alone, because if you travel to anywhere in the world and see an Innoson vehicle, you will know that it is made in Nigeria. Innoson is our own and all Nigerians are supposed to support the brand by buying Innoson vehicles. “
On the level of patronage, the Innoson Group Chairman said he was happy with the level of patronage of the CNG buses since the era of fuel subsidy ended, because, according to him, the need for the vehicles is rising. Orders for Innoson vehicles, he confirmed, have been coming from both private individuals and government.
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