By Jordan Arseneault
Toronto, Ontario – July 5, 2018 -- Volkswagen is ready to start manufacturing vehicles in Nigeria.
Pending President Muhammadu Buhari’s approval, Volkswagen will have the green light to start production in Nigeria. With a bill being recently passed by the National Assembly, Volkswagen is closer than ever to moving forward with their objective. The German company introduced a development plan targeting automotive growth in Nigeria back in 2013.
Currently Nigeria manufactures approximately 10,000 vehicles per year, a small number when examined on the global stage. Despite this, Thomas Schafer, chairman and managing director of Volkswagen, is confident in the potential of Nigeria’s automotive industry.
“I personally believe that Nigeria is good for 2,000,000 cars per year; with good government policies and collaboration with the industry, this can be achieved,” said Schafer.
Presently Nigeria’s automotive development is being stagnated by imported used cars. Volkswagen would look to end this trend by investing more than 100 million dollars into the first stage of its project. Schafer explained that Volkswagen would also locally source 70 percent of raw materials used in the production of their vehicles.
“You need to localize the raw materials otherwise there will be no cost advantage,” said Schafer. “If you bring in all the materials, the logistics cost will kill the project. Nigeria has a lot of raw materials that can be used.”
Volkswagen will now have to wait and see how Buhari views the situation and if he believes in the company’s vision.
“A country like Nigeria has a very hard decision to make because it is either the country continues to import second and third hand cheap substandard vehicles which is cheap and consumer friendly or the country wants to create jobs,” said Martyn Davies, automotive industry leader in Africa.