AfriPulse
The persistent foreign exchange volatility and the failure of the Nigeria’s government to implement the automotive policy more than a decade after its introduction have been identified as major obstacles hindering growth in the country’s automotive sector.
The Managing Director of Honda Automobile Western Africa, Daisuke Mita, in an interview with The Guardian in Lagos, over the weekend, said that the current situations had made investment unstable.
Mita, however, said that while the foreign exchange had shown signs of improvement recently, the exchange rate remained excessively high and continued to impact negatively business operations.
According to him, policy inconsistency was one of the most significant concerns for investors in the sector.
He stated that the automotive policy introduced in 2014 was designed to run until 2024, but decried that another policy covering 2023 to 2033 was announced without a proper evaluation of the first one, stressing that despite this, none of the two policies had been signed into law.
He maintained that the lack of a legally backed framework had created uncertainty for investors, particularly as government attention shifted towards emerging technologies such as Compressed Natural Gas (CNG) conversion and electric vehicles, while local assemblers still struggle with challenges surrounding conventional internal combustion engine vehicle production.
He added: “We have not seen the level of clarity or support initially promised. We began local assembly with a 10-year growth plan, but that vision has not been fully realised.
“Our factory remains underutilised due to an unconducive operating environment. While some assemblers have exited the market, we have sustained operations.
“Honda has been in Nigeria for over about five decades. Our automobile business dates back to the 1970s, so it is about 50 years now. In addition, we have a motorcycle business, also under Honda, which began operations around 1970 and has been active for over 46 years as a subsidiary.”
Mita maintained that investor confidence could only be restored through the enactment of a comprehensive automotive policy that provides long-term protection for investments and encourages local manufacturing.
He also canvassed for stronger government support through patronage of locally assembled vehicles and the introduction of affordable vehicle financing schemes.
Mita further advocated a gradual and structured approach to regulating used vehicle imports, particularly accidented vehicles, to support the growth of domestic assembly plants.
However, despite the mounting challenges, Mita was optimistic about Nigeria’s long-term potential.
He explained that the country’s population continued to grow with strong market opportunities, but noted there was still a huge transportation gap that needed to be addressed.
Besides, Mita said the company intended to expand its operations and introduce new products, but noted that progress would depend largely on improvements in the policy and economic environment.
Source: Guardian Nigeria | Read the Full Story…
