Motor Vehicle and Miscellaneous Sector

Motor Vehicle and Miscellaneous Sector are discussed herein. We hope you find the article informative and helpful for your research.

Motor Vehicle and Miscellaneous Sector in Nigeria

Motor Vehicle and Miscellaneous Sector
Motor Vehicle and Miscellaneous Sector – Photo Source:

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In Nigeria, serious national efforts at the development of the automobile industry manifested in 1975 with the conclusion of joint venture agreements with Peugeot Automobile (PAN) and Volkswagen (VWON) for the local assembly and manufacture of passenger cars.

Other agreements followed with Steyr, Anamco, Leyland, and National Trucks for medium and heavy commercial vehicles and agricultural tractors.

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Licenses for light commercial vehicles were also granted to five companies which have so far remained dormant. In 1983, the industry was in a healthy nascent stage as it recorded a turnover of about one Billion Naira.

Direct labor employment stood at over 16,000 while capacity realization was 80% for cars and 30% for heavy commercials.

Today, in terms of production, the industry is merely a ghost of itself with output and employment reduced to 10%. The sharp decline can generally be ascribed to the current prohibitive costs and policy measures of trade liberalization under the Structural Adjustment Program.

These in turn can be traced to low local value-added as reflected in high dependence on assembly operations and a poor base of local technology and technical facilities.

The automobile industry is a major guzzler of basic industrial raw materials. The main ones are:

1. Steel sheet and alloy forms

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2. Cast Iron.

3. Non-ferrous metals e.g. copper and aluminum

4. Inorganic non-metals e.g. glass and asbestos

5. Organic high-molecule materials e.g. rubber and plastics

Typically an automobile would be composed 0f about 75% iron and steel, 2% of non-ferrous metal, 15% of rubber and plastics, and 3% glass as a structural material.

For the development of the motor vehicle sector, local content must be seen as the underlying rationale. Local content may manifest at raw materials processing and assembly stages and may embrace design, standardization, research, and development.

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Currently, the level of local content remains low on average and in some plants is limited to pure assembly. Various reasons have been adduced for this, ranging from the non-availability of basic raw materials through inadequacy or absence of functional processes and facilities to excessive variety and lack of standardization.

The lack of basic raw materials is not the only crucial factor. The dearth of modern industrial processing facilities such as foundries, forges, press, and machine shops represents a major constraint on local production.

Similarly, there is no comprehensive census of such facilities has been undertaken and one is vitally needed. Thus, it is obvious that whatever exists may not be adequate in terms of size, performance, and quality to meet the stringent requirements of the industry.

The importance of the automobile industry in a developing country like Nigeria cannot be overemphasized. Based on the experiences gained in the auto assembly plants using completely knocked down parts, Nigerians have realized that some of the automobile components can be fabricated locally.

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The raw materials could easily be developed through the acquisition of requisite technical know-how, the identification and classification of the raw materials as well as the establishment of automobile engineering research institutes and companies.

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