Says Nigeria has whitewash assembly plants
The implementation of the Nigerian automotive policy will be difficult to rate, because it has always been one step forward but two steps backward. And that has to do with reversal of policy and policy somersault; board member of the Manufacturers Association of Nigeria (MAN), Dr. David Obi has said.
Obi, who is also the managing director of DVC Limited and DVC Plastics Limited, noted that the percentage of local content substitution is the yardstick to measure the success of an auto policy; saying unless the country is able to ascertain that a certain percentage of the local content substitution, has been achieved, it cannot say that the auto policy has taken off.
He noted during a recent interview with newsmen in Lagos that before the collapse of Nigeria’s first auto policy, Peugeot had achieved 40 per cent local content substitution.
According to him:” Nigeria’s first auto policy industry collapsed because of policy somersault.
“He said if government gives somebody opportunity to set up a factory and after building the factory and buying capital-intensive heavy duty machines, and the factory is about to start production, the government removes import duty on the finished products, “that will kill the local factory even before it takes off.”
He said in the past, Nigeria had glass and vehicle windscreens made in the country. “We had seat-belts produced in Asaba, while tyres, paints and many others were locally made.
“Michelin was here at a time, but they had to leave because you put a high duty on imported tyres today and when the local industry starts manufacturing, the government will remove the duty, thereby putting the local manufacturers at risk. Where are the auto component makers today? They have all gone.”
Obi also said when a committee he was a member was working on the auto policy documents before it was finally revised, there was nothing like (semi-knocked down) SKD 1 and SKD 2 assembly in it.
“It was when SKD 1 and SKD 2 came in that things changed. In the early days of auto assembly, when we were doing it, we were all doing (completely knock-down) CKD assembly and we started from the scratch. That was when you have to do painting because if you are not doing painting, that means you have not done any job.
“That was why in those days; the cliché in the auto industry was that if you are not DVC-compliant, you are not assembling, because if you are truly assembling, you must need and use the necessary chemicals from DVC Limited. Ask any of the assembly plants today if they are DVC-compliant. I don’t know of any who buys our sealants to do jobs before painting. They don’t paint anything. Even those who have paint shops and ovens don’t use them anymore, because they are looking at others who are cheating. So they have all joined in the cheating arrangement. I call it ‘screwdriver assembly,” Obi said.
He said all the so called auto assembly plants are doing in Nigeria is to go to Japan, Korea, China or anywhere and bring in finished cars, thereby helping to create jobs in foreign land. “They remove some few things and put them in the container and bring it here and screw them together again. There is no chemical applied, no brush, no spraying and nothing done. I call them whitewash assembly plants and it is not good for the country because jobs are not created. “
Obi further said that it is only Bangladesh and Nigeria among the 10 most populated countries in the world that do not have viable auto industry.
“There is no county with high population in the world that does not have a viable auto industry because the industry creates wealth. The multiplier effect of the auto industry is such that, if you do local content substitution, a lot of cottage industries, companies and manufacturers will be supplying items. This is because auto industry is an assembly job and not only manufacturing.”
He said a vibrant auto industry impacts on many sub-sectors. But the country lost that opportunity with the collapse of the first generation assembly plants.
“We are the 7th most populous economy in the world with a growing middle class. With one million vehicles per annum, there are lots of things that we can gain from a healthy auto industry,”he said.
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