The Nigerian automotive industry stands out compared to other African automotive industries – in almost every way, sometimes positively, sometimes negatively. The country is home to one of the largest vehicle parks on the continent with nearly 12 million units – around six times Kenya’s fleet. On the other hand, the country’s automotive industry is, in large parts, significantly more informal than that of peers such as South Africa and Egypt. This circumstance makes it a very challenging place to do business for many international automotive firms. However, the potential rewards for those succeeding in it are enormous.
We have completed many private sector projects in this space, including the latest one for a large multilateral organization. africon interviewed executives from more than 60 companies and conducted multiple surveys locally to identify funding/ engagement opportunities for the client.
Local manufacturing of both vehicles and components in Nigeria is presently in many areas complicated due to insufficient or poorly implemented regulation. However, some segments of the industry enjoy more favorable conditions, allowing for growing local manufacturing activity. The deciding factor is most often protection from cheap imports. Luckily, large parts of the market want a “natural” level of protection: neither domestic parts trade nor various workshops and digital services can effectively be imported. In most cases, local firms reap significant benefits, while international investors often perceive the risk to be too high.
Ultimately, africon presented a list and assessments of approximately 20 expansion projects in Nigeria, with which the client can engage to promote industry growth, job creation, and development. These projects include both local and international firms, early-stage ideas up until ready-to-invest undertakings. We hope to see many of these grow into shining examples of effectively utilized opportunities in Nigeria soon.
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