Nigeria’s $210 million automotive industry lags behind peers such as Morocco, South Africa, and Egypt due to low demand for locally-made vehicles and reliance on imported second-hand cars.
In 2023, Nigeria produced only 2,034 vehicles, representing 0.04% of GDP, compared to Morocco’s 535,825 vehicles valued at $31.4 billion, contributing 24% to GDP.
South Africa produced 633,337 vehicles worth $20 billion (5.3% of GDP), while Egypt produced 23,754 vehicles valued at $1.5 billion (0.31% of GDP).
Despite having a combined capacity to produce 500,000 vehicles annually, Nigerian plants operate at about 2% capacity.
Companies like Nissan, Honda, Innoson, and others struggle due to inadequate market demand.
Takashi Nakajima, managing director of Honda Automobile West Africa, emphasized the need for local market support to boost production.
Industry leaders suggest legislative support, development of a component manufacturing masterplan, and incentives for complete knock-down (CKD) assembly to improve the sector.
Experts like Benneth Ejindu and Luqman Mamudu advocate for passing the NAIDP 2024 into law to enhance investor confidence and reduce dependence on imported used vehicles.
They stress that Nigeria has the potential to produce various automotive parts locally, which would support the industry and stimulate economic growth.