Nigeria Auto Industry gets Boost as TATA Invests $8m

Nigeria’s automotive industry has got a fresh boost with TATA Motors investment of over $8 million (N1.5bn) as part of its preparations to roll out its first batch of Nigerian assembled cars for subsequent exportation to other parts of Africa.

 

Kshitij Verma, the company’s regional manager, made the disclosure during a meeting with the management of National Automotive Council (NAC) on Thursday in Abuja.

The target of the company is not just to start assembling of automobiles in Nigeria but also to establish a sub-regional centre in Nigeria where vehicles will be manufactured for exportation, Kshitij said, saying already the company had employed over 240 Nigerians, many of whom were currently undergoing training in India. They have already installed a factory on a large expanse of land measuring about 130 hectares at Ijebu Ode, Ogun State.

Industry watchers believe that such investment would save Nigeria huge foreign exchange, which is annually spent on car importation as figures from National Bureau of Statistics put current car importation on over a trillion annually, thereby putting pressure on the nation’s foreign reserves.

They maintain that with investment in the automotive sector by Original Equipment Manufacturers (OEMs), Nigeria’s foreign reserves would not be under intense pressure, especially now the country is suffering from dwindling oil resources.

TATA

In his response, Aminu Jalal, director-general, NAC, said the coming of TATA and other foreign auto companies was an expression of the confidence global investors had in the potentials of Nigeria’s auto industry.

The demand of wholesale vehicle import in trillions of naira annually is not sustainable, Jalal said, adding that automotive demand in foreign exchange is the second largest on Nigeria’s reserves and that there is an urgent need to reduce it.

“Unlike in the previous attempts in automotive development in Nigeria, which was undermined by badly managed trade liberalisation policy, the present attempt is characterised by the involvement of local entrepreneurs with experience in the motor industries,” Jalal said.

He assured that “NAC has the competence to ensure that Nigeria is not short-changed in this strategy to diversify the Nigerian economy, as the sustenance of the automotive industry is critical in this regard.”