Repositioning Nigeria’s Automotive Industry At 65

Globally, there is an auto-revolution; from traditional petrol-powered vehicles to electric vehicles (EVs) and driverless cars.
The auto trend, no doubt, magnifies the urgency of catching-up, adapting and repositioning Nigeria’s auto-sector as the country marks 65 years of independence.
From the establishment of the first assembly plants in the late 1950s, to the entry of Peugeot in Kaduna and Volkswagen in Lagos in the 1970s, and Anambra Motor Manufacturing Company Limited (ANAMMCO) in 1977, Nigeria stood out as a hub of vehicle assembly in Africa.
Lately, the entry of Innoson Vehicle Manufacturing (IVM), Nord Automobile, among others, has revved up the sector.
The automobile sector, at its peak, provided thousands of jobs, boosted local content, and spurred a chain of ancillary industries such as tyres, batteries, and spare parts.
The National Automotive Design and Development Council (NADDC) was established by Act No. 83 of May 30, 2014, merging the former National Automotive Council and the Centre for Automotive Design and Development to serve under the Federal Ministry of Industry, Trade and Investment.
Its mandate includes formulating the National Automotive Policy, recommending incentives and protective measures, overseeing design and assembly programmes, and encouraging local content in components, thus driving the auto sector in the country.
Nigeria’s automotive sector has continued to record modest progress including under the present administration.
This is evident with recent policy interventions, revived institutions and clearer regulatory signals by the federal government and also the vital steps made towards reviving local manufacturing.
The director-general of NADDC, Joseph Osanipin, upon his assumption to office on October 17, 2023, emphasised on boosting domestic production, increasing licensed assembly plants, and ensuring that quantity per plant improved in the country.
At the inauguration of the council’s board in July, the director-general said that annual production of locally assembled vehicles had risen from about 3,000-4,000 units to over 12,000 by the end of 2024.
One policy drive earning praise is the “Nigeria First” initiative, announced in May, which mandated federal ministries, departments and agencies (MDAs) to procure Made-in-Nigeria goods including vehicles and auto parts.
According to Osanipin, the policy is a critical step toward reviving local vehicle assembly and boosting economic development.
Stakeholders such as IVM and Dana Motors, while expressing strong support for the policy, said it would generate demand and create jobs for Nigerians.
Chairman of IVM, Innocent Chukwuma, was upbeat.
“The policy will encourage patronage of locally made vehicles and enable the country to conserve foreign exchange otherwise spent on imported cars and spare parts,” he said.
In addition, the Nigeria Automotive Manufacturers Association (NAMA) hailed the proposed Local Automobile Industry Patronage Bill, which aligned with the “Nigeria First” agenda.
NAMA chairman, Mr Bawo Omagbitse, said the law could revolutionalised the automotive industry in Nigeria.
“It could mark a turning point for the sector by guaranteeing sustained government patronage and boosting investor confidence,” he said.
Beyond policies, the NADDC had also advanced efforts to increase local parts production, with Osanipin emphasising that the country must reduce its reliance on imported components.
He said necessary structures and frameworks had been put in place to tackle import dependence which reportedly costs Nigeria about one billion annually.
“Nigeria has the capacity to begin local manufacturing of spare parts.This will not only reduce import dependence but also create a viable supply chain that supports our assembly plants and the council aims to increase the share of locally manufactured components in vehicle assembly.’’
The director-general, while reiterating the importance of transiting to alternative fuels like Compressed Natural Gas(CNG) and EVs, said it must be built on standards, safety, capacity building and infrastructure.
“The future lies in electric vehicles, renewable energy, and local innovation.With the right policy consistency, Nigeria can reclaim its place as Africa’s automotive hub,” he said.
He said there was the need for national occupational standards to guide maintenance, retrofitting and conversion of vehicles for CNG use, and for EV servicing.
At a training programme in Owerri, for instance, Osanipin stressed that a skilled workforce was essential to realising Nigeria’s aspirations in clean transport, noting the importance of certified conversion workshops and consistent standards nationwide.
He also acknowledged that while CNG offered environmental and cost benefits, Nigeria currently faced infrastructure gaps hindering a more rapid adoption.
On training and skills development, Osanipin announced that 21 Automotive Training Centres were being established across Nigeria’s six geopolitical zones.
These centres are being equipped with state-of-the-art tools, including training for CNG conversion of petrol vehicles.
He said the council, in a bid to explore financial mechanism for local manufacturers including tyre factories, recently partnered with the Bank of Industry (BOI), where stakeholders at the meeting underscored the need for accessible funding to strengthen value chains and improve competitiveness.
The director-general said in spite the progress made in the sector, challenges still persisted which the federal government through council and other parastatals was tackling in the interest of Nigerians.
Sen. John Enoh, Minister of State for Industry, during the inauguration of the NADDC Governing Board in July pledged to work with the National Assembly to fast-track legislation to bolster investor protection and regulatory frameworks for the auto sector
Enoh, while reiterating the Federal Government’s commitment to transforming the automobile sector, said the administration targeted mass production of Made-in-Nigeria vehicles.
He said that spare parts and auto maintenance issue must be addressed to boost demand for locally made automobiles by Nigerians.
Meanwhile, stakeholders in the sector have decried continued issues of infrastructure, financing, and policy inconsistency, hindering the growth and development of the sector.
Mr Anthony Attah, an automobile expert, reiterated the need for urgent investment in local content, saying that, without strong local content and reliable infrastructure, our growth will remain limited.
“The auto sector, which once thrived in the 1980s with brands like Peugeot and Volkswagen assembling in Nigeria, has faced setbacks due to policy reversals and influx of imported used cars.
Yet, industry experts believe the present administration’s renewed focus offers hope.
“By promoting local assembly, investing in component production, and ensuring sustained government patronage, we can finally reposition this sector as a driver of industrial growth,” Attah said
Mr Rafiu Garba, an auto dealer, called for deeper partnerships of the government with private investors, research institutions, and skilled manpower development to meet modern technology required in growing the sector.
“Although there seem to be some recorded progress in the sector, the coming years will determine whether the sector can overcome structural hurdles and deliver on its promise of jobs, innovation, and economic diversification,’’ he said
Mr Chukwuma Madueke, an economic expert, reiterated that local producers had continued to grapple with high production costs.
According to him, forex scarcity and energy costs has made it hard to compete with imported vehicles.
“We need stronger incentives and deliberate enforcement of auto policies to grow local content.’’
Madueke said the influx of second-hand cars was a major setback.
He said that while the vehicles provided cheaper options for Nigerians, they crowded out opportunities for local manufacturers to expand.
“In spite these challenges, opportunities remain.
“The African Continental Free Trade Area (AfCFTA) offers a platform for Nigerian-made vehicles to reach wider markets.
“The global transition to electric and green mobility also opens space for innovation and investment.
“It is therefore important for the government to sign the National Automotive Policy into law to secure foreign investments and deepen local assembly operations,’’ he said.
An industry analyst, Ajuma Omale, said that while several assembly plants in the country remained under-utilised, Nigeria’s vehicle ownership ratio lagged far behind global standards, reflecting both affordability concerns and the need for a more vibrant financing system.
Omale warned that unless infrastructure such as reliable power supply, modern transport networks, and skilled manpower improved, local manufacturers might struggle to compete with global players.
Stakeholders say the path forward is clear: a coordinated push for policy stability, adapting to modern trends, infrastructure support, and innovative financing.
With Nigeria’s large market and entrepreneurial base, they believe the automotive industry can still deliver on its original promise of jobs, industrialisation, and mobility for millions. (NANFeatures)