Spot The Difference

Much noise has been made and continues to be made about Nigeria’s magic auto policy. By the way, I found what I think is a copy of the policy at the National Automotive Council’s website here. Nothing new in there except that I found an admission that prices will rise (page 105) even though the government continues to deny it. There’s also a lot of exclamation mark usage as if to drive home the point. But that is neither here nor there.

So a few days ago, the Director of Policy and Planning in the National Automotive Council, Lukman Ahmed, gave Nigerians this wonderful news:

The National Automotive Council on Tuesday announced that plans had advanced for about 30 vehicle manufacturing plants to open business in the country.The Director, Policy and Planning, Lukman Mahmud, said this was in line with the Federal Government’s plan to ensure local production of vehicle components begins in-country.The arrangement would ensure the distribution of vehicle parts through the Nigerian automotive industry at competitive prices, to create employment opportunities for the people.Prior to the introduction of the National Automotive Industry Development Plan by the Federal Government in 2013, the country had 14 existing plants at different locations in the country.According to Mr. Mahmud, the provision of incentives and protection to the industry under the new auto policy persuaded 16 fresh companies to establish their assembly plants in the country.

This is fantastic news indeed. Especially because many countries are dying for this kind of investment. As I have said previously, some countries actually bribe car manufacturers to come and setup plants in their country. In terms of investments, a vehicle manufacturing gig is one of the best ones a country can hope to have. It’s not just the jobs it creates, but the quality of those jobs as well. Workers get trained in very useful skills and a single vehicle plant can be the economic lifeblood of a town for decades. Here in the UK, if you take Nissan out of Sunderland, devastation is what you will get in its wake.

Yet Nigeria, simply by publishing a document, is now in danger of being overrun by so many manufacturers who want a piece of the action. The fact that Toyota felt the need to publish a disclaimer in the papers need not detain us here. They are simply haters who wont know a good investment if it landed on their lap.

photo (2)

 

Be that as it may, I want to do a quick comparison around the world of investments in car plants just so we know what we are getting in Nigeria. That way if, God forbid, things don’t go according to Aganga’s plan, we can at least know where things went wrong.

As we know, Nissan has been the first out of the blocks to start ‘making’ cars in Nigeria under the ‘Proudly Nigerian’ slogan. Thankfully, when carmakers announce new plants in a country, they tend to issue a press release about it which summarises their plans and what they hope to achieve. With that in mind, let’s sample some Nissan announcements.

On y va Brazil

In January Nissan announced a new engine plant in the Resende Industrial Complex in Rio de Jainero [emphasis mine]:

Nissan will invest R$140 million in the construction of the engine plant and will generate approximately 200 direct jobs. The industrial unit will use an existing building adjacent to the Vehicle Plant and will begin its activities with the production of the 1.6-liter, 16V I-4 flexfuel engine, with 111 hp and torque of 15.2 kgfm – when using ethanol – one of the most efficient in the Brazilian market.

Also this bit

The local production of engines makes the project of Nissan’s Industrial Complex in Resende a complete center. With investments totaling R$2.6 billion (U.S. $1.5 billion), the industrial unit will be one of Nissan’s most sustainable in the world, and will originate in 2014 two Brazilian cars: Nissan March and Nissan Versa.

On y va Thailand

Only a couple of weeks ago, Nissan announced its second plant in Thailand to produce the Navara:

Nissan today announced the opening of its second production plant in Thailand. The new plant will be a production hub for the NP300 Navara, Nissan’s new generation pickup truck, destined for export to 45 countries around the world. Thailand is a key market for Nissan, an integral part of their growth strategy in Asia. The country now boasts two plants and an R&D facility, and is increasing in importance as the company’s Asian hub for exports and manufacturing. Nissan has invested 3.7 billion Thai Baht ($116m) in the 580,000 square meter facility, bringing with it 2,000 new job opportunities. Full production capacity is expected to reach 150,000 units per annum.

Also:

Nissan has also invested 162 million Thai Baht in the new plant’s zero discharge program, and will recycle all industrial wastewater through the Reverse Osmosis (RO) process. Nissan will continue to provide training to subcontractors and employees to raise the awareness of waste management and resource reduction

On y va Mexico

In June, Nissan announced an alliance with Renault and Daimler to build a new plant in Aguascalientes, Mexico:

Renault-Nissan CEO Carlos Ghosn and Daimler CEO Dieter Zetsche announced today that their companies have agreed to establish a 50:50 joint venture, the business entity that will oversee construction and operation of the new plant in Aguascalientes in north-central Mexico. The new plant will be built in the immediate vicinity of an already existing Nissan plant and will have an annual capacity of 300,000 vehicles when fully ramped up.

Start of production is planned for 2017 with Infiniti models. The production of Mercedes-Benz brand vehicles will follow in 2018.

Daimler and Nissan will share the total investment cost for Aguascalientes of approximately €1 billion. The companies will add almost 5,700 jobs (including engineering, line workers and support staff) by the time the plant reaches full capacity, expected in 2021. In addition, a high localization rate will significantly increase the Mexican supply base

Also:

In November, Nissan opened the first stage of a US$2 billion manufacturing complex in Aguascalientes. This increased Nissan’s total capacity in Mexico to more than 850,000 vehicles annually

On y va Indonesia

In May, Nissan announced the opening of its second plant in Jakarta:

Nissan today inaugurated its new manufacturing facility in Indonesia. The second plant in Purwakarta, Indonesia, represents an investment of 33 billion yen (US$325m) and is a significant step forward for Nissan to become a leading brand in the country. The investment is also an important part of the company’s market expansion plan stated in its six year mid-term business plan, Nissan Power 88.

The 60,000 m2 facility includes body assembly, paint, trim and chassis operations. With the expansion, Nissan increases its production capacity in Indonesia from 100,000 units per year to 250,000 at full ramp-up. The new plant will generate up to an additional 3,000 jobs in the region.

On y va China

Two years ago, Nissan announced a new plant in Dalian, China under its joint venture programme with Dongfeng Motor Company:

Dongfeng Motor Co., Ltd. (DFL), Nissan’s joint venture in China, today announced it will build an all-new manufacturing facility in Dalian, Liaoning Province, China with an investment of up to RMB 5 billion (USD $800 million). The Dalian plant, scheduled to begin manufacturing NISSAN-branded passenger vehicles, will have an initial annual production capacity of 150,000 units by 2014, and will expand up to 300,000 units.

On y va Russia

Also in 2012, Nissan announced a new plant in St. Petersburg, Russia:

Nissan is targeting a 10% share of the rapidly growing Russian market by 2016 (up from 5.9% today) which will be achieved by tripling annual sales from the 2011 total of 161,000 units.

To support this, capacity at the St Petersburg Plant will double to 100,000 units in 2014FY The announcement follows last year’s capacity increase at the plant which currently manufactures the Teana sedan, X-TRAIL SUV and Murano crossover, to 50,000 following the introduction of a third production shift.

Nissan will now invest a further €167m to add 50,000 square metres of new production facilities, including Press and Plastics Shops. As well as bringing total plant capacity to 100,000 units, the expansion will enable St Petersburg to produce up to five different models simultaneously

On y va India

In 2010, Nissan started production at its new plant in Chennai, India. As usual, it announced it:

The plant at Oragadam, spread over an area of 640 acres, represents an investment of 45 billion Rupees ($990 million) and the capacity to produce 400,000 units per year at full ramp up. Today, the plant employs 1,900 workers and will reach 3000 in two years time. The company, along with its supplier park in Chennai, estimates a total of 6,000 jobs to be created in the region.

Ok I can see you rolling your eyes which tells me you are getting bored with all these. So one last one

On y va Portugal

Five years ago, Nissan announced a new plant in Aveiro, Portugal to produce car batteries:

Under the agreement with the Government of Portugal, Nissan will invest over €160 Million in the new facility and directly create 200 new jobs at the plant. This investment follows the announcement in November 2008 that Portugal will work with the Renault-Nissan Alliance to implement a zero emission mobility program from 2010. Within this plan, the Alliance will supply its electric vehicles from January 2011, and the Portuguese government will leverage an extensive network of 1,300 planned recharging stations that will be installed across the country over the coming two years

 

All the press releases are taken from Nissan’s websites. Feel free to click on the links. Now that we have been around the world and have a decent idea of how Nissan announces production in a country, we only need to compare these with their announcement in Nigeria. Apologies, but I will paste the whole press release from April this year below:

Nissan today became the first major manufacturer to build a car in Nigeria in response to the introduction of the new Nigeria Automotive Policy.

The inaugural vehicle, a Nissan Patrol, rolled off the production line at the Lagos assembly plant, marking a key milestone in the company’s continued wave of expansion into high-growth markets.

Nissan is targeting significant growth in Africa as the company builds momentum towards achieving its Power 88 goals, a commitment to reach 8% profitability by the end of fiscal year 2016. Elsewhere in the world as part of the high-growth markets strategy, plants have been opened in Mexico and Brazil with projects underway in Indonesia, Thailand and China. Last year Nissan announced it will be the first manufacturer to build cars in Myanmar, after the opening up of the economy in the south-east Asian country.

The first “built in Nigeria for Nigerians” Nissan Patrol follows the signing last year of a Memorandum of Understanding for vehicle assembly in Lagos between the Renault-Nissan Alliance and West African conglomerate Stallion Group.

Since then, preparing for production in Nigeria to global production standards has been achieved at a rapid pace, setting a new benchmark in responsiveness and organisational agility.

Takashi Hata, Nissan Senior Vice President and Chairman for the Africa, Middle East and India region said: “For Nissan, Africa is our strategic growth driver. Demand for cars is growing quickly in African markets as demonstrated by the first model being produced a mere seven months after the announcement of the new Automotive Policy. By acting quickly to begin production in Nigeria we are securing for ourselves first-mover advantage.”

Nissan South Africa Managing Director Mike Whitfield, who also heads up Nissan’s Sub Sahara Africa region, is delighted with the successful launch of the first Patrol. “Nissan was a pioneer in the foundation of the car industry in South Africa. Now we are once again at the forefront of manufacturing in Africa, this time in Nigeria where we see huge potential. We want to play our part in the economic growth of Nigeria and Africa.”

The rollout of the first Nissan vehicle comes shortly after confirmation that Nigeria’s booming economy has now overtaken that of South Africa. Africa’s most populous country is pivotal to Nissan’s mid-term growth plan, which seeks to double sales on the continent by FY2016, up from 110,000 units at the end of FY2012.

Nissan’s growth strategy in Africa gained momentum with the introduction this year of Nigeria’s new Automobile Industrial Policy, aimed at stimulating development of the auto industry in the country.

“We are grateful to the Nigerian government for implementing automotive legislation that is conducive to investment and that was instrumental in our decision to open an assembly plant in partnership with the Stallion Group, already our exclusive distributor in Nigeria,” added Whitfield.

Nissan anticipates vehicle demand to increase in this oil-rich country, which is seeing a rise in fast-growing industries including finance, retail, communications and film.

In addition to the Patrol, Nissan also plans to produce the Almera and NP300, starting in early May and followed by mass production in August. With these three models, Nissan aims to be a significant player

Hmmm. What’s going on here? Where is the money? From what we can see from all the examples above, a car plant is a serious investment and costs a lot of money. And Nissan never fails to tell you how much it has invested or plans to invest in the future. But these rules have been suspended in Nigeria – without investing anything, Nissan has managed to roll out cars ‘built in Nigeria for Nigerians’.

There is no mystery here – no investment has been made in the country. This auto policy has handed them a captive market without any upfront commitment from them in terms of hard cash. Nigerians should remember this in future when they are tempted to complain about ‘foreign companies ripping us off’. If you were Nissan, would you do different? Simply by removing the tyres before importing and then adding them back when the cars land in Nigeria, you have qualified as a ‘car manufacturer’ in Nigeria. Even the plant where this ‘assembly’ is going on in Lagos was already assembling buses long before the noise of this ‘auto policy’ started.

It’s not even the end of the world if things like this happen. Anyone is free to come and build cars in Nigeria without investing anything. Good luck to them. But to make a song and dance about how your ‘policy’ is causing a stampede of investors and then – adding insult to injury – raising tariffs on Nigerians in the name of this briefcase investment is completely ridiculous. When you see carmakers coming to invest in Nigeria, you will know. And the government will need to back up such investments with more than a badly written piece of paper.

As usual, we have turned a serious matter into a joke. Something which costs hundreds of millions of dollars in other countries has ‘transformed’ into a thing so trivial that 16 manufacturers are coming to Nigeria to just be littering the country with car plants. We know how this movie is going to end.

Left to Ifeanyi Ubah, Chief Cosmas Maduka is doing nothing more than ‘pure water business‘. But credit where credit is due, the man has been selling cars in Nigeria for a while and probably knows a thing or two about how the industry works. Recently he gave an interview to CNBC Africa on the ‘auto policy’ and after starting off by pledging his loyalty to said policy, he let slip his real thoughts on the thing. The video is here

Around the 4 minute and 20 second mark, you hear him say ‘we should not do things just to get attention‘ in reference to the auto policy. Or perhaps the minister.

Maybe this is what this is all about then. In which case, nothing much to worry about as the policy will probably die a natural death after the elections next year. Vote wisely because your vote will not be refunded if you hand it to anyone on the expectation that 30 car plants are going to start production in Nigeria.

 

FF

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82 thoughts on “Spot The Difference

  1. Feyi, I quickly fast-forwarded myself to your closing paragraph:

    “Maybe this is what this is all about then. In which case, nothing much to worry about as the policy will probably die a natural death after the elections next year. Vote wisely because your vote will not be refunded if you hand it to anyone on the expectation that 30 car plants are going to start production in Nigeria.”

  2. You know have done a series of articles on this AUTO POLICY before now, and I was so sure you were not going to disappoint by sticking to the same line of argument here again…LOL

    1. Favour, I went to read your link. Any policy will have winners and losers. Ade-Ojo as an importer is bound to be on the losing side even before implementation of the policy. The market for his business is being choked and the car manufacturing market is no longer free as a barrier to entry has been created for some with the introduction of the high tariffs. I don’t know the origins of the policy formulation process. Potential gainers may have sold the patriotism bait and asked for protection from the government. Crowding out TNL and used car sellers is anti-competitive because the new manufacturers have the incentive to set high prices. In fact allowing importation of new and used cars may be more competitive and to the benefit of Nigeria and her people. I think TNL has been in the car manufacturing business long enough to smell an opportunity. It would be instructive to know TNL’s main arguments against this policy.

  3. This is the part I don’t get.

    The Director of Policy and Planning in the National Automotive Council (NAC), Lukman Ahmed, said “plans had advanced for about 30 vehicle manufacturing plants to OPEN business in the country”.

    But “Prior to the introduction of the National Automotive Industry Development Plan by the Federal Government in 2013, the country had 14 existing plants at different locations in the country”.

    The according to Mr Lukman Ahmed, “the provision of incentives and protection to the industry under the new auto policy persuaded 16 fresh companies to establish their assembly plants in the country”.

    So assuming the 16 fresh companies is valid, why are they tossing the ‘30’ all about? Because it makes them feel better? Hmmm.

    I sha hope the Auto Policy works out sha. Me too wan use brand new cars before I die.

    1. While you are all lamenting here, HYUNDAI would be rolling out N1.6m and N2m priced SEDANS called GRAND – completely made in Nigeria by September – keep suggesting to yourselves that the policy won’t work because you hate GEJ!

  4. I have been wondering if the conditions that mitigate against manufacturing in Nigeria have changed. Are these new companies coming in because the cost of production is very low or because, irrespective of costs, the manufacturers will make profits? It is easy for government officials to back a policy that touts patriotism especially if they are politicians. Civil servants too will agree with Oga’s idea because they need to keep their jobs and because these brand new cars will soon become government official cars which will be boarded and sold to the top echelon of the service in a few years. I read Aganga in one of the earlier posts was given some Innoson vehicles for personal and official use by Peter Obi. Could this be part of the lobbying?

    1. Tolu – it is only fair that AGANGA that preaches this message should be driving a made in Nigeria – go to ABUJA, many of the MDAs already use INNOSON vehicles – and he is releasing a N1.5m in the next couple of weeks!

      1. Tolu, yes that was what he told me over the phone – that he drives the Innoson.
        However what I SAW in Abuja in May during WEF Africa was the 2014 Range Rover.
        Adesina also drove one too so it seems that is the official car for ministers.

        But I did not see a single Innoson vehicle anywhere there during the event and I mentioned this as being a missed opportunity.
        These are the simple ways we test govt’s sincerity …and why no one should be surprised when these policies die as quickly as they were born

  5. Why is Nigeria filled with too many anyhownesss?if we had working system and not an attention seeking economy like Chief Cosmos said,Aganga should be sacked already,he has done nothing but rather crippled the economy.
    I wasn’t too surprised when Nigeria had a different Automotive policy, that is who we are,that’s how we have always been differently, we will suck it all up and watch what unfolds after the elections.

    1. Kingsley – you should have your head examined rather than Aganaga being sacked – because you are making categorical comments on a policy you know nothing about. For example do you know the number of cars imported into Nigeria per annum before now and FOREX value of that?

    1. Mr Mark – GEJ and AGANGA would be remembered for doing what TEN PRESIDENTS before them couldn’t do – taking the bold move of calling the bluff of international car brands to make cars in NGR or pay 70% duties to import them – let us see how you much love Toyota Japan by buying a N6m Corolla when you can buy HYUNDA GRAND for N2m or INNOSON SEDAN for N1.5m!

  6. And again the cookie crumbles. The bigger question is. do Nigerians understand? They have kept Nigerians illiterate just so they can rape the country. What does it take to work at the arm of government that draw up polices like this? Do they have any dreams at all? Can one do a two months internship with them to see what goes on there? Just wondering!

    1. Ben Narder – they have GREAT VISIONS – na you no read the vision – they have a dedicated website for this – and they have a PDF of the policy document – and thus far, the car companies are happy after the initial anti-FGN lobby against this – and they are going to be smiling to the bank – what I don’t get is why folks like you who are not in the industry are lamenting like this?

      1. You are lowering the tone with your constant bullying & PDP praise singing. This is not the place.. Try ThisDay or something.

  7. Stallion Motors paid N235m for the VWON assembly plant in being used now to roll out Nissan and Leyland Buses. There is nothing wrong with the Auto policy, but there is something wrong with a sinister analysis like this that sees nothing good in anything. Obasanjo’s cement policy at the time created Obajana Cement today

    1. Bisi

      There is tons of new things here – with VWON, the local producer had no incentives to produce here because a typical buyer would buy imported rather than local possibly at lower rates – if you were a local producer, would you have wanted to continue production at that rate?

      1. Then you don’t need to bother yourself about Feyi’s write-up – this is like 4th to 5th in the series – and the next must justify all the previous ones – that way he doesn’t get to lose his audience – this is the worst form of intellectual dishonesty known to man!

      2. Favour, at least I think bothering to write 5 pieces on auto policy is better than just parroting support for a govt policy you have not even read. But like I said, your case is beyond redemption so no point wasting times really

      3. Feyi – I have read all your articles on the subject and I have done a couple of articles as well stating my positions on the topic – and I have commented all your threads as I’m doing here – and you can INSULT ME all you choose – I will continue to “steal away” your thinning out audience that you love to mislead albeit cheapishly by SHOWING them the depth of the anti-NGR that you love to sell!

        And as regards the insults, I still take like 5 years take old pass you – shebi you be Yoruba boy, ask those around you what that means!

  8. Favour and Bisi, we don’t need to use any harsh words on one another. We can have a debate devoid of such. I summarise Feyi’s article more as a warning to the Nigeria’s economy rather than an attempt to discredit the policy for the sake of it. He has supported his argument with evidence of the behaviour of car makers entering the market in other countries unlike what they have done in Nigeria and is asking why. I suppose auto manufacturers should be asked how much they plan to invest in the country so they can be judged in future on whether they conformed or not. There is a difference between a promise of spending say $50b and spending a tenth of that compared with not saying anything and spending same $5b. The amount spend may seem large but someone hasn’t lived up to expectation. There is never a perfect policy anywhere but what a policy-maker does is to implement according to a decision rule which covers a wide spectrum on which lie gut-feeling, need for votes and robust scientific evidence. I believe it is the duty of a good follower to point out any flaw or perceived flaw in any aspect of society so that those in charge can make amendments. We also need to realise there may be different perspectives on issues and that is why clarifications need to be made if someone with an opposing view asks a question.

    Favour, you asked me earlier which matters more to me “personal business” or “growth of the Nigerian economy”. I care about both to the extent that it is individual businesses which form the bedrock of the economy. I am however not in support of any anti-competitive tendencies. I doubt if TNL sent car manufacturers away from Nigeria. Their departure may have increased their market share. I am of the opinion that businesses like TNL and used car sellers should be left to compete with the incoming and currently available manufacturers rather than killing them off. Let the invisible hand will correct the market. I’d like to ask here if Innoson is “personal business” or “Nigerian economy”?

    Aganga is free to “do what he preaches”. My question came up as part of a discussion of the policy development process specifically if there is a link between the car maker and the auto policy. Is there any need for the minister to be seen as a fair umpire?

    1. Tolu:

      You wrote:

      “I doubt if TNL sent car manufacturers away from Nigeria. Their departure may have increased their market share.”

      Bros, no one is sending TNL anywhere – rather TNL sells and distributes TOYOTA BRANDS to other distributors in NGR – it is simple – If TOYOTA GLOBAL can’t manufacture the cars they would have imported into Nigeria locally, they should continue to bring them in at 70% TARIFF – and guys like you that love the brands so much can as well buy the COROLLA you currently buy N5m for N8m while folks like my buy locally-made HYNUNDAI GRAND for N2m!

      It remains a free market – you buy yours and I buy mine – make we who go lose!

      1. Aganga doesn’t need to be FAIR – he works for NGR not JAPAN or GERMANY or SOUTH KOREA – in those other nations, their own ministers also defend their local markets – they don’t talk about “being fair” at the expense of their nations – NGR can’t be different!

      2. No, it is not a free market. A market has both a supply side and a demand side and there should be free entry and free exit for suppliers and consumers. A hike in tariff affecting certain suppliers is an obstacle in the way of free entry (and possibly exit). What do you about allowing everyone to get their cars into the market and letting consumers choose? Is it possible that by ‘promising’ the ‘Nigerian’ car makers the Nigerian market, they have an incentive to skimp on quality? Does the policy create any agency to monitor quality and punish erring manufacturers or will it be linking up with existing bodies? I am only discussing the economics of the topic. I don’t think you know me enough to write or speak about the toyota bit of me better to leave it out.

      3. Tolu:

        My responses to your comments:

        1. “No, it is not a free market. A market has both a supply side and a demand side and there should be free entry and free exit for suppliers and consumers. A hike in tariff affecting certain suppliers is an obstacle in the way of free entry (and possibly exit). What do you about allowing everyone to get their cars into the market and letting consumers choose? Is it possible that by ‘promising’ the ‘Nigerian’ car makers the Nigerian market, they have an incentive to skimp on quality?”

        My response: Kindly give me examples of 3 developing markets around the world where the NATION allows 100% Free Markets to play as regards “Imported v Locally-produced cars”

        2. “Does the policy create any agency to monitor quality and punish erring manufacturers or will it be linking up with existing bodies? I am only discussing the economics of the topic. I don’t think you know me enough to write or speak about the toyota bit of me better to leave it out.”

        My response: There is the National Automotive Council [NAC] that is specially set up to deal with this – it is working with the relevant stakeholders in the industry to deal with such issues – you can always send them emails via their website on your concerns – shebi you are also a Nigerian? Then I don’t know what you mean by “Toyota bit of you?” What is the meaning of that?

      4. From the many messages today I have come to realise you and Feyi have a history which I was unaware previously unaware of.
        I will not give you any examples of any market because that is beside the issue. My point to you is that you need to stop using the phrase “free market” because it has a different meaning from what you are proclaiming. It isn’t called a “free market” only because you can go in to buy a cheap car but also because many sellers are allowed in the market. The introduction of a higher tariff restricts a section of the market thereby restricting the market the freedom to self determine.

        The “Toyota bit of me” is in reference to your statement about “… guys like you that love the brands so much can as well buy the COROLLA…..”. Just trying to tell you to leave my personal life out of any argument here as you do not know me or my affinity for Toyota products.

  9. Am not one to haul insult at every opinion. We need to be better than the guys we criticize!. So the question is if Obasanjo was able to create the enabling environment for us to become the largest cement producers in Africa within 10years who says we cant benefit from the new auto policy? Going great length to discredit one man’s effort is not the right thing to do but actually contributing your own positive quota.Peugeot was once the favorite cars of Nigerians, not because there weren’t Mercedes Benz, but we had a comparative price advantage over imported ones and that was sustained for more than 25years before the industry collapsed.At their height, both exported cars to the world, our trucks were coming out of Bauchi and Enugu.The demand is there. Now FF may not agree, but my brand of economics is different. Every country supports its local producers, Americans support their own, if we cant create something fresh and we can add value in manufacturing why not? I was once a skeptic, but i have seen the right things done in teleoms and cement, we have a template to replicate. simple

    1. Bisi – FEYI doesn’t care about NGR – all he cares about is to prove to the world that “NGR Is failing under GEJ/PDP” – even if NGR becomes the no 1 exporter of cars in AFRICA in 5 years, once PDP remains in office, he would write two articles a month to discredit the policy!

      Ask all those who have hailed him on this article “what do you have against this policy” – they can’t give you an answer – na so so follow-follow dem dey do!

      1. Aguntasoolo….And Aganga can drive any car he wants by the way. That’s the benefit of a free economy.

      2. Bisi – Nice; so AGANGA pays more for the RANGE ROVER – and I pay less for the HYUNDAI GRAND – it remains a FREE MARKET – they have not said DON’T IMPORT ANY CAR – rather – Import and pay 70% import tariff – people have been buying PORSCHE, LAMBOs, CARDILLACs, etc before the policy and they will continue to buy them – so what are you complaining of?

    2. Bisi, if you wanted an alternative, just ask instead of assuming that I just criticise. Sorry, I am not one of those people. If I criticise something, it’s because I think there’s a better way to do things.
      My annoyance with this policy is that it is absolutely no different from all the stuff we did in the ’70s and the car industry today is completely different and so tightly integrated that getting to produce cars will take far more than making noise and waving a piece of paper around.

      Anyway, my ideas if you can be bothered to read them https://aguntasolo.com/2014/01/01/from-nnewi-to-the-world-with-apologies-my-alternative-auto-policy/

  10. It dosent matter if an idea is new or if it’s old, what matters is how it’s executed. If execution is poor, the result will be poor so if the Auto policy was a rehash of the 70’s idea or not is not the important thing. Does it work and will it benefit Nigerians? The Lagos metro line conceived in 1979 is just being implemented in another format. Does it mean it’s bad? Nooo. It solves the problem of transport in Lagos. Remember that for developing countries we thrive despite our rulers, while the developed world thrive regardless of thier leaders. It’s not the same thing. I am not about PDP or APC, am about a better Nigeria. We thrive despite both of them.

    1. Bisi:

      We can’t keep PLANNING FOR A BETTER FUTURE by making constant REFERENCES TO OUR PAST FAILURES – most of you screaming the 70s here were not even born then – what is this addiction to the past then? If we failed at something in the 70s doesn’t automatically mean we will fail in 2014? Is it?

  11. Quite right, Aganga has a right to “drive any car he likes”. It is indeed a benefit of living in a free economy (while we still have one). However, driving a car you were given free isn’t really walking the walk, especially if you spend your own money on a Range Rover.

    I think the fundamentals in Nigeria are all wrong for attracting foreign investment.
    We go on and on about aggregate demand of 160m people, but that still has to be balanced out against a myriad of very serous risks. This is why a company like Nissan would be so non-committal. They wouldn’t want to piss off the honourable minister by saying “NFW!”, so it is understandable they would join in the ridiculous charade. It costs them nothing and they keep their options open.

    In reality, there is really nothing on the table, except an impending ban on imports, which will probably do for the auto industry what the rice import ban is doing for rice production in Nigeria. Nothing.

    1. We seldom get it wrong with FDI’s. There are different degrees of FDI investment. it dosent have to come all the time at greenfield. When GSM was launched in Nigeria, there was only one FDI at the time. MTN. All the monies for Econet was sourced locally, Glo a later joiner is self funded. Today, Econet has been severally traded and is now Airtel, the FDI came twice to buy the company. Most FDI’s in Nigeria today are at the level of seed PE which is fine. Your famed UK isnt even attracting anything.London is a pure consumer economy. Felistowe port is already awash with cheap Chinese Fast forward to now, do we throw a policy away because Nissan isnt interested? No, we wont. No country needs a pompous investor, they are free to go to Thailand or wherever. Nigerians deserve to drive brand new cars and they will get it. You may not like Innoson or any of the local brands that’s fine.
      On Aganga, because the dude wears a Rolex and drives a Range Rover dosent mean he dosent believe in the policy.He is a single consumer and he has his preferences. Should he eat only rice because he is trying to encourage local production? Such beggarly position is what kills us…

      1. Bisi:

        Now someone finally has some sense on this thread – FEYI writes an average one article a week – always lecturing Nigerians on how “Everything Works Well all over the World” – the only problem he has though is that “Nothing can ever work well under PDP Govts” – so irrespective of what you tell am – hin no go hear – then it gets worse, when you tell him “Bros, but this is the same examples other successful nations follow” he will tell you are a GEJ supporter – that is INTELLECTUAL DISHONESTY if you ask me!

      2. Bisi, before you talk, try to use google.
        Here’s my assignment for you – read up on London Gateway and then come back and talk about how ‘my famed UK’ is not attracting investment.
        The way Nigerians beat their chest in ignorance is quite amazing.

        Read my lips – the number one driver of FDI is rule of law not returns.
        When you understand that, you will calm down

      3. ‘Nigerians deserve to drive brand new cars’…how can any sensible person say this?
        What has deserve got to do with anything? What invention in car making has Nigeria contributed to the world of car manufacturing?

        Amazing…why not carry a copy of the auto policy to the nearest car dealer and tell them to hand you a car because you deserve one?
        We deserve the govt we get

      4. Favour, when I wrote this piece on the NMRC https://aguntasolo.com/2014/01/17/mortgage-sturves-a-conversation/
        The Finance Minister shared it on her facebook page and the ministry’s website without even asking my permission.

        You did not accuse me of intellectual dishonesty then.
        To think that someone like you regularly boasts of being older than me in public…yet your head is just there on your neck causing adding weight to your body and nothing else 🙂

      5. FEYI:

        Aside from the NMRC one, I have shared some of your other articles on my wall – and written tons of comments therein APPLAUDING you for the work you did – then you took this dangerous bend/turn of writing BASED ON YOUR CONVICTIONS and not the FACTS – which you have maintained with this CARS SUBJECT – and I am doing what I did earlier when I praised you – I am being FRANK with you – you can’t kill a policy before seeing its implementation or otherwise!

    2. Mogo – to you – EVERYTHING IS WRONG IN NIGERIA – the only thing that is right in this market is YOU and the APC! LOL

      Aganga was a MD at GOLDMAN SACHS before he got the NGR job – he can buy a 70%-tariffed RANGE ROVER AUTOBIOGRAPHY for N30m if he chooses – the policy doesn’t forbid acquisition of luxury cars, it only tariffs it higher – and the majority of NIGERIANS don’t buy RANGE ROVERS – they buy N1.5m to N4m cars between TOKS and NEW options – that’s the people the POLICY targets the most – that way they can buy NEW cars at about N1m to N1.5m of the same variants if they were imported.

      I will keep offering these free lectures here – pending when some others SHOW ME EXACTLY what is wrong with this policy!

      1. Some MDs earn £70k. Some can earn £500k. The same title. So stop displaying your usual ignorance by throwing around the MD title as if it’s Nigeria you are talking about.
        But that one is even beside the point.
        The Range Rovers they were driving were OFFICIAL cars – are you deaf or you are just pretending not to hear? Adesina too was driving the same thing with OFFICIAL FGN numbers.

        That you are too dumb to see the folly of the policy does not mean there is nothing wrong with it. If you stop drinking Jonathanian propaganda for a few minutes and appreciate that those who criticise do so because they too are Nigerians and they care about their country, maybe you will engage your senses.

        I have used the example of Mexico several times and I asked Aganga himself about this – what do we want to be as a country? Do we want to make car for Nigerians or do we want to be a manufacturing hub and create jobs? Any sensible person should take the second person because the Nigerian market for new cars is not big enough for anyone to come and set up anything in Nigeria.
        If we want to be like Mexico that manufactures 3 million cars yearly and exports 99% of them creating 500k jobs in the process, then why are you slapping tariffs on ordinary Nigerians as if they committed a crime by buying cars they can afford?
        If these new cars are going to be so cheap as you are claiming, why do you need 70% tariffs to make the alternative expensive?

        This policy does not know its left leg from its right leg but you continue to support it as if its something that was well thought out and will do wonders for Nigeria.
        If na by policy, do you know how many countries can write a piece of paper and start making cars?

      2. FEYI:

        SO you mean with AGANGA;s previous JOB as GOLDMAN SACH’s MD, he can’t personally afford to get a LEASE from COSCHARIS for a brand new RANGE ROVER?

      3. FEYI:

        I have debated this same subject of the POLICY DIRECTION with you in the past – and my question to you – here and now is – MUST the FGN see this policy from your narrow line of reasoning? Must we admit with you that “A market that imports 400k to 500k cars a year should not be allowed to make cars locally because MEXICO manufactures 3m?”

        Did MEXICO start out the first day by manufacturing 3m cars per year? Didn’t grow to that level? Don’t they have the US next door as a ready-made market to export to? Did the US begin to buy from them from day considering concerns with trade laws + quality?

        You want to to do wuruwuru to the answer by giving us NUMBERS without CONTEXTS – but it won’t work – NGR also has WEST AFRICA next door – who can also DRIVE NEW CARS instead of TOKUNBO if the price is right – why can’t we kill two birds with a stone – satisfy local and export consumption – even within the first year!

        What I see here is BLIND ARROGANCE – because you can always sit with AGANGA everytime he comes to LONDON and he is humble enough to listen to you doesn’t make you even remotely as intelligent and experienced as he is – so stop this your empty boasting all the time about TALKING WITH HIM – it is too cheap – I beggi!

      4. Please o Favour, I have NEVER sat with Aganga anywhere o…I have better things to do with my time.
        I have only ever spoken to him on the phone and I documented what he said as fairly as possible.
        Someone read my blogpost and arranged that phone call.

        So I am asking you – if the intention is to manufacture NEW cars for the West African market or even Nigeria, why are you putting tariffs on imported second hand cars?
        In this whole policy instrument, what exactly are the tariffs meant to achieve?
        This is the point you cannot answer.

      5. FEYI

        SO much for your MEXICO example – this is a PwC report that supports my position as at March 2013 – http://www.pwc.de/de/internationale-maerkte/assets/doing-business-mexico-automotive.pdf

        It shows that in 2004, MEX made 1,094,000 cars compared to 2,045,000 in 2012 – that shows GROWTH and shows they didn’t start making 3m cars in the first year of production – don’t sell ECONOMIC THEORIES that don’t exist – every industry/corporations starts from a POINT and grows THEREAFTER – if NGR starts at 100k cars a year, we will grow to 500k to 1m and more in the future – NGR is 170m people with a growing MIDDLE CLASS that must buy cars!

      6. FEYI

        And we can EXPORT and SELL LOCALLY at the same time – we just need to adopt the right strategies – what I expect you as a NIGERIAN that got largely FREE EDUCATION from home before you left is to discuss with AGANGA & Co how these strategies can be developed to EXPAND NIGERIA rather than selling propaganda that the entire industry would fail because dem no listen to you – wetin dem teach you for MANCHESTER MBA wey another person never read before?

      7. We ‘just need to adopt the right strategies’…everything is so simple.
        Just write a policy and publish it and all will be well.
        It’s all as simple as ABC

        Dem no teach me anything for Manchester o.
        In fact if you buy N2k data on your phone, you will learn everything I learnt

      8. FEYI

        My position is the POLICY can achieve both LOCAL CONSUMPTION and EXPORTS – this is game of NUMBERS and nothing more – If I can sell CHEAPER NEW CARS at home and in WEST AFRICA, I will sell to both markets!

        I also don’t care if you CALLED or SAT WITH Aganga – it would have been nice to see you do that with a MILITARY MINISTER UNDER IBB though!

  12. Rational investors now called “pompous”? I say the pomposity is all ours.
    We always expect our own will be special.. That somehow, other rules will apply?
    However, same rules apply everywhere.. It’s just the risk premiums that vary.

    Few players have the appetite for that and those that do like to pretend they are playing under ‘normal’ conditions. Meanwhile, they’ve paid the powers that be upfront for near monopoly conditions and price everything in. MTN being one of these official success stories & Dangote being an ‘unofficial’ one. He is about to be handed the rice market on a golden platter, after smugglers and custom officers have had their wicked way for the next few years.

    Btw were you seriously comparing the UK & Nigerian economies? Now that’s what you call pompous!

    1. Mogo

      Toyota Nigeria Limited or Toyota GLOBAL [in this case] are not INVESTORS rather they are cheap profiteers – they don’t invest nadda in NGR – and they have done this for decades – they simply BRING IN CARS; collect FOREX; share the profit with their local partners and leave – NO JOBS created; no INCENTIVES for the growth of our economy – nothing!

      1. Yes Favour, they ‘simply’ bring in cars and collect forex. It’s so easy!
        The people who buy these cars dont use them for public transportation.
        The people who buy the cars dont use to travel in comfort from one place to another
        These cars that help in the transportation of people and goods from one place to another do not contribute anything to the growth of our economy.

        Toyota are using juju for Nigerians which makes them pay their hard earned money for these cars without receiving any value in return at all.
        I pray I can have the kind of babalawo that Toyota have.

      2. FEYI

        YOu love BABA ADE OJO so much since he is from your VILLAGE – then tell him to manufacture THE TOYOTA CARS in Nigeria and keep the monies in NGR and sell cheaper cars to NIGERIANS!

      3. Ok Favour, sense has departed from you as usual.
        Go ye forth and be a better Jonathanian.
        I am sure you’ve learnt something today and I didnt charge you a kobo.

      4. FEYI

        There is nothing you can teach me – NADDA – I have given you points here that you didn’t know of until today – you should be the one thanking me!

  13. Aguntasolo…Using veiled insult is not the stuff i expect from an intellectual debate. i find your comment ” before you talk use google” rather debasing.

    1. Too bad but you’ve lost my respect with that silly comment about my ‘famed UK’.
      You just revealed yourself as the typical Nigerian who likes to talk about what they dont know.
      What was your point in trying to paint me as an outsider? Mr Man, I’m as Nigerian as you are so please park that kind of talk somewhere else

  14. Favour,

    To be honest, I’m basically going with a few newspaper articles and Feyi’s analysis. His points are easy enough to follow and he provides links in case I wish to drill down and verify any of his claims. This is a lot more than I can say for your counter arguments. The alternative would be to read the whole blasted policy document myself and that would just be an unnecessary duplication of effort.

    The one thing I have observed for myself is this government’s love of banning things. They know exactly whats best for the rest of us, impose a ban and all we actually see happen is prices going up for the consumer, a party crony cleaning up and very little structural change. Obasanjo established this as a way of paying back big party donors, but this regime has taken it to another level. They love to see people suffer.

    I call you “PDP”, so you call me “APC”.. I get it.

    1. MOGO:

      What has this GOVT banned that was hitherto GOOD for the economy? Don’t you watch BLOOMBERG and CNBC BUSINESS to see how other nations REGULATE their markets? Who allows just everyone to just reap everything from its local markets leaving same in LIMBO? Why did OBAMA bail out the US CAR COMPANIES – why didn’t he say “let JAPANESE TOYOTA and HONDA/German VW play in open markets and let market forces prevail?” Why did he do same with US BANKS rather than let BRITISH BARCLAYS to win the day?

      You young folks who call yourself PATRIOTIC NIGERIANS should drop this default attitude of NEGATING EVERYTHING THE FGN does!

  15. i didn’t know i earned your respect, its not expected. But your intellectual arrogance and being rather uncouth is rather worrying. Budding cyber bullies ,our new export to the world.

  16. Meanwhile, guys, can we give a round of applause to.Favour Afolabi? He has done so well here he deserves a bonus.
    Voltron of the month.

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