The dwindling volume of sales occasioned by an inter-play of factors like high naira-dollar exchange rate, scarcity of forex and lack of purchasing power in the auto market, among others, has continued to drive vehicle plants’ operations to low levels of capacity utilisation.
The situation in the auto sector, as in many other segments of the economy, has heightened the call by stakeholders for incentives for automakers, in addition to the diversification of the economy beyond the present dependence on oil.
This, they argue, would reverse the recurring problem of lack of foreign exchange earnings and the unfavourable effects on the value of the naira, forex availability, prices of vehicles and affordability.
And, to help the industry survive the critical period, the automakers have called for special government intervention in the form of concessionary forex allocation, full patronage of made-in-Nigeria vehicles and reduction in the cost of doing business.
Moreover, the Nigerian Automobile Manufacturers Association (NAMA) has at different times decried the uncontrolled importation of used vehicles, lack of sustainable policy framework and the prevailing harsh business environment that have been adversely affecting local production of vehicles.
Lending his voice to the appeal for remedial measures recently, a leading player in the domestic industry and Group Managing Director, Kia Motors Nigeria, Jacky Hathiramani, bemoaned the stunting impact of high operational overheads and economic recession on the industry.
The Dana Group MD, however, expressed confidence in the ability of the current administration to take the industry out of the woods, which he said is evident in its sustenance of the auto policy and the move to use it to boost local production of automobiles.
Hathiramani said: “As players in the auto industry, we are not oblivious of the challenges inhibiting local production and full realisation of the gains of the auto policy. At Kia, we believe that despite these daunting challenges, the government’s favourable disposition towards repositioning the auto industry at the centre of local production and Nigeria’s industrialisation, is laudable.”
He hailed the recent appointment of Mr. Jelani Aliyu, a man who has excelled in the global auto industry, as the director-general of National Automobile Development and Design Council.
“The cap fits,” he affirmed, citing Aliyu’s international experience as an indicator.
Hathiramani expressed optimism that, with the new order in the council and government’s support, the Nigerian auto industry would get back on a path of sustainable growth. He also urged the federal, state and local governments to patronise locally-produced vehicles to demonstrate their genuine commitment to the ‘Buy Nigeria’ campaign.