PAN raises alarm over FG's plan to reduce import duty on vehicles, tractors

•Produces .5m vehicles

FOREMOST Nigeria auto-mobile manufacturer, PAN Nigeria Limited, which parted ways with Automobile Peugeot of France early this year made history as the only auto maker in Nigeria to have crossed the production of 500,000 vehicles. The Kaduna-based automobile manufacturer which is now a multi-brand auto producer made a total of 523,000 vehicles during its 47 years alliance with Automobile Peugeot.

This achievement stood PAN Nigeria out as the only automobile maker in  Nigeria to have crossed the half a million production mark. For now, PAN Nigeria is channelling its experience towards the production of other reputable brands like Higer and Chery, two Chinese leading brands that are renowned for the production of various categories of vehicles. 

A PAN Nigeria source who spoke to Vanguard Motoring but wouldn’t like his name in print said the two new brands offer the company and its customers wider range of products. He said: “While Higer is a leading producer of pick-ups and buses, Chery is renown for the production of passenger cars and Sport Utility Vehicles”. The source further said that the “divorce between the two companies was quite peaceful as none took the other to court,” adding “we are now concentrating on the production of whole range of vehicles from sedan to Sport Utility Vehicles and buses which at the long run would benefit our customers across the country.”

The source said that PAN Nigeria went for the best brand, stressing that it applied its experience in the auto industry spanning almost five decades, to secure quality brands that meet the needs of their customers who trusted their judgement to deliver the right and quality products that march their tastes in every segment. With this development, PAN has transformed from a mono to multi brand auto manufacturers in Nigeria. 

It should be recalled that the PAN ruled the Nigeria automobile space in the 70s and 80s, dominating the market with models such as Peugeot 404, 504, 505 range. These vehicles were available in sedans, estates and pickup. It later introduced the 406, 301, 307, 408, etc.

Peugeot Automobile Nigeria Limited which later changed to PAN Nigeria Limited was incorporated on November 15, 1972 with the corporate objective of carrying on the business of assembling and manufacturing of motor vehicles from its plant in Kaduna. The company began operations in 1975 in keeping with an agreement between the Federal Government of Nigeria and Automobile Peugeot (AP) of France to produce designated cars and commercial vehicles marketed by AP. Its initial capacity was 15,000 per annum on a single shift. This was later increased to 48,000 units annually.

Nigerian government’s shares in Peugeot Automobiles was 35 per cent, while AP France had 40 per cent shares. Nigeria Industrial Development Bank, UTC Nigeria Limited, and SCOA Nigeria Limited respectively had 5 per cent. Katsina and Kaduna state governments held 5.3 and 4.7 per cent respectively.

However, the company’s capacity utilisation of the plant declined steadily from 1983 which led to change of ownership at various times until the company parted ways with its Nigeria partner. The resulting low volume of production affected the attractiveness of the investments in local content supplier industries. It should be recalled that PAN was actively striving to increase its local  content which got to 35 per cent in the 1980s. Precisely, as at 1989, the company claimed that it achieved 30 per cent local content on its 505, and 18 per cent on Peugeot J5 bus.

The company approved an investment plan covering the year 1989 to 1992 during which $4.9 million and N32.4 million was invested in developing and launching various local content parts ranging from stamp parts, sleeves, piston, plastic and rubber parts.

However, owing to high cost of borrowing and uncertain nature of the market, PAN developed a computer-based ordering system to minimise time between order and arrival of CKD packs and minimise, as much as possible, the quantity being processed for order at a given time without jeopardising production flow.

Presently, the Dangote Group has acquired Peugeot in Nigeria with another plant while PAN Nigeria Limited retains its plant in Kaduna where it is currently producing the Higer and Chery brand of vehicles.

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