General Motors: Ban On Importation Of Tokumbo Car, A Condition For Successful Auto Manufacturing In Nigeria!

American automobile manufacturing giant, General Motors, yesterday stated that unless some critical measures are taken by the federal government, Nigeria cannot reap the benefits of a thriving automobile manufacturing industry for which it released a comprehensive policy last year.

The President and Managing Director of General Motors, Africa, Mr. Mario Spangenberg, who spoke at the announcement of Kencept Autocenter Limited, as the handler of the distribution of one of its brands, Isuzu, in Nigeria, stressed that although his company was interested in investing in the assembling of vehicles in the country, it would be impossible to take the business decision unless some essential steps are taken.

Spangenberg said unless the new auto policy makes parallel import of new cars and import of used ones impossible, it would be difficult for a local automobile industry to survive.
"We want to take our time to study the policy and get a better insight into the political will to support it. How are we sure that the policy is sustainable? We were here before but we had to leave the market, if this policy was in place, our company would not have pulled out of the country," he said.

According to him, "we need assurance that the policy would be backed up by law to prevent it from being jettisoned. To make a decision for manufacturing, you need understanding of the consistency of the policy. GM has not made any investment commitment but we are by no means overlooking the opportunities that abound in Nigeria. We have had fruitful deliberations with the National Automotive Council and I go back with more information to better decide to make a move."

The GM boss warned that Nigeria must moderate its expectations of a rapid take off of the auto industry, stressing that it would be difficult to think that any manufacturers will step up in such a short period especially with used cars and parallel import still coming in at good rates,

"It would be a major disincentive to the emergence of a thriving industry in Nigeria."
He argued that the Nigerian auto industry would only stand a chance if used cars are made more expensive and less attractive, with dealers in the products made to pay the appropriate duties and levies.

Spangenberg explained that for a nation like Nigeria, the need to develop the auto industry goes beyond simple numbers and profitability because being a country with one of the fastest growing youth population in the world, the government should be seriously concerned about how this teeming army of young people will find gainful employment.

"For a country with over 160 million people with over 50 per cent of these people being young people between 20 years and 50years old, government must deploy measures to ensure that large numbers of descent jobs are created and one way to achieve this is the development of industries like automobile," he said.

Also speaking at the event, General Manager of Koncept Autocentre, Mr.Gaurav Kaul, said the Isuzu business with GM was already yielding benefits.

According to him, major restructuring within Kewalram Chanrai Group, one of Nigeria’s most diversified business concerns, led to the recent dealership agreement entered into between General Motors South Africa (GMSA) and Koncept Autocentre Limited, a Kewalram Chanrai Group subsidiary.

The new arrangement means that Koncept Autocentre is empowered as joint importers and distributors of the new generation Isuzu Pick-up in Nigeria.

Kaul said the partnership had reached an advanced stage and they are setting up facilities nationwide that will revolutionalise the marketing of all Isuzu models, including the commercial segment.

He noted that together with his team, he hoped to bring his expertise and long years of experience  auto industry into the newly-acquired Isuzu franchise.
GM Nigeria on the advice of its parent manufacturers, ended operations in the country on account of lack of profitability to sustain its existence.

That transition period provided GMSA an opportunity to critically examine its activities in the country with a view to establishing good market presence. thisdayonline.