Morocco, South Africa and Egypt Out Drive Nigeria's $210million Automotive Manufacturing Industry

Nigeria’s automotive industry, valued at $210 million, is struggling to keep competitive with such peers as Morocco, South Africa, and Egypt. This primarily due to low demand for locally manufactured vehicles and a heavy reliance on imported second-hand cars.

Recent reports highlight in 2023 Nigeria produced approximately 2,034 vehicles, amounting to $210 million, which represents about 0.04 percent of the country’s Gross Domestic Product (GDP). In stark contrast, Morocco's automotive sector manufactured 535,825 vehicles valued at $31.4 billion, contributing 24 percent to its GDP. While South Africa, the continents second largest automotive producer, manufactured 633,337 vehicles valued at around $20 billion, representing 5.3 percent of its GDP. 

The prominent automotive companies in Nigeria include Nissan Motors, Honda Motors, Innoson Vehicle Manufacturing Company, Hyundai Motor Company, Ford Motor Company, GIC Motor Companies Ltd, JAC Motors, KIA Motors, Dangote, Lanre Shittu Motors, Mikano, Nord and VON Automobile Nigeria.

While in contrast Morocco, has over 250 manufacturing companies, including Fiat, Renault and Opel. In recent years, the Moroccan government has incentive's manufacturing by providing subsidiaries of up to 35% to create manufacturing facilities, enhance ports and develop rain transport infrastructure. As a result, the country has increased local manufacturing facilities and become a hot spot for regional investments. 

South Africa is also home to major manufactures such as BMW, MAN, Stellantis, Nissan, Ford, Toyota and more. 

Despite Nigeria’s vehicle assembly plants having a combined capacity of 500,000 vehicles per year, they currently produce only about 2 percent of this capacity, despite over N500 billion in combined investments, according to the National Automotive Design and Development Council (NADDC).

The value of passenger car imports into Nigeria surged to N1.47 trillion, marking a 224.67 percent increase from 2022, according to the National Bureau of Statistics. Joseph Osanipin, director-general of NADDC, acknowledged that Nigeria's auto industry contributions to GDP and job creation remain low in comparison to Morocco and South Africa. He urged the public to support locally-made vehicles, stating, “By choosing made-in-Nigeria cars, you are investing in the future of our nation. Let us consume what we produce and produce what we consume.”

Osanipin has recently embarked on a tour of the Nigerian automotive manufacturing plants in an attempt to increase awareness, promote regional manufacturing and discuss realistic plans to increase manufacturing output. 

Current WAAS Chairman, Luqman Mamudu, noted that the importation of second-hand vehicles undermines local manufacturing. He advocated for the passage of the NAIDP 2024 to 2034 Act to foster investor confidence, suggesting that all imported used vehicles, including salvage, must be accompanied by integrity certificates from their countries of origin. Mamudu proposed creating a N100 billion intervention fund to provide vehicle acquisition loans specifically for made-in-Nigeria cars.

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