In view of the growing concern by stakeholder on the sustainability and possible review of the auto policy, the Chief Executive Officer of Kia Motors Nigeria, Mr. Jacky Hathiramani has called on the Federal Government to address the key issues and lingering challenges militating against the development of Nigerian automobile industry.

Jacky Hathiramani, CEO, Kia Motors Nigeria

According to him, one of the major challenges bedeviling the development of automobile industry in Nigeria is the staggering amount and alarming rate of used vehicles importations.

He noted that for the industry to grow, the importation of used vehicles needed to be addressed. Despite the business challenges, it pose to the local manufacturers, the level of the economic menace it constitutes cannot be overemphasized.

The government he said needed to be steadfast in its pursuit of economy growth by tackling importation of used vehicles and also strengthen the border to drastically reduce the spate of smuggling into the country.

When the administration addresses the influx of used vehicles, there will be a corresponding demand for the new locally-made cars, which will create a mass production and in turn drastically reduce the prices owing to a resultant effect on the cost of production.”

He opined that, the thrust of the Nigeria auto policy needs to be restructured to further create an enabling environment for the local assembling companies.

He said: “Taking a cue from developed countries where local manufacturers are given government aids and tax exemptions for Semi Knocked Down, SKD, parts and components from import tariffs, the current administration can further reduce or exempt local companies from import tariff, which will go a long way in reducing the cost of producing the vehicles thereby reducing the prices and giving them a competitive edge.”

While lamenting the current state of the nation’s power supply, he enjoined the government to revamp the power sector for adequate provision of energy to support local plants. The operational cost of an assembly plant in Nigeria today is high based on the epileptic power supply and the high cost of running power generators has continued to have effect on the pricing of Nigerian made vehicles,” he said.

Jacky further stated that adequate power supply was the fulcrum for sustainable economic growth. Saying to make the locally assembled vehicles compete favourably and produce affordable vehicles to the teeming public, the business environment needs to be conducive.

The key initiative of government should be centred on reducing the cost of doing business in the country. He stressed that the current administration needed to focus on pragmatic automobile policies – to drive growth and economic diversification. Jacky advised that foreign automakers who are not partnering with local companies to establish assembly plant should be barred from operating in the country to help strengthen the local assembling plants.

Most importantly, the government needs to encourage the local assembly plant owners by enlisting them in its fleet requirements and solely use vehicles that are assembled in Nigeria.

Jacky stressed that the new political dispensation which rides on the goodwill of President Buhari offers a great opportunity to bring about the desired change in the economy and it’s important to immediately formulate investment friendly policies and embark on a trajectory growth of the economy through structural development of the automobile industry.

There is the need therefore for the administration to establish a constructive and transparent policy to promote the development of local businesses. If the policies are well implemented, Nigeria will in no time supply the made-in-Nigeria vehicles to neighbouring countries and the country can move from consuming economy to a producing nation thereby ushering in trade surplus in the country’s balance of trade.