Stakeholders demand scrapping of SKD phase
While the waiting game lingers on a definite policy pronouncement that would clearly define the next direction of Nigeria’s automotive policy, some stakeholders in the auto and allied component manufacturers have called on the federal government to scrap the SKD (Semi Knocked Down) category in the tariff structure, to encourage serious investment in the sub-sector.
During a one-day automotive stakeholders forum held in Lagos with the theme: ‘’Accelerating The Growth Of The Nigerian Automotive Sector; Policies For Sustaining Vehicle Financing Schemes And Components Manufacturing, the industry players stated unambiguously that while auto policy is a good document, the problem lies in walking the talk.
Among other deliberations, the forum noted that the ability of government to link the comparative advantages like quality raw materials to competitive advantage is the spark needed for a revamp of the local component manufacturing industry.
Taking a critical look at the core responsibilities of government and expectations of the private sector and the need to scrap the SKD category under the automotive policy, the panelists called on government to set up a focused ministerial team to inspect, audit and evaluate the claimed level of investment by the registered 41 auto-assembly plants.
This is with a view to retaining and supporting only the serious ones among them defined by ownership and deployment of visible assembly-specific assets, that is production machinery
At the one-day forum organised by the Federal Ministry of Industry, Trade & Investment in collaboration with the National Automotive Design and Development Council (NADDC), the Nigerian Investment Promotion Commission (NIPC) and GEMS-3, the gladiators asked the federal government to introduce discriminatory duty regimes as against the current across-board approach.
This can be achieved through identification of volume-driver models working with the manufacturers. Government was also asked to set up project teams that will involve in government and brand owners to develop local content deletion calendar for the identified models and or categories to enable attainment of good volumes, economies of scale and competiveness in local component manufacturing.
As part of government responsibilities in attracting and stimulating long term investment in local auto assembly, the body wants authorities concerned to focus the assembly of 1.3-liter engine capacity for mass ownership of low cost cars, small and large capacity buses for mass transit, light trucks for distributive and agricultural operations as well as ban importation of bodied trucks except where no local source exist.
Looking at the Policy Options for Automotive Component Manufacturing, the first session panellists made up of Tony Arenyeka, CEO, Truckmasters Nigeria Limited, Markus Thill, Group President (Africa), Robert Bosch, Dare Lawal, former General Manager, (Marketing), Dunlop Nigeria Plc amongst others solicited for more collaboration between the NADDC and the Auto assemblers.
They were of the conviction that government should sponsor road-shows to global suppliers overseas to attract investors. Policy makers are to identify and promote synergies between OEMs and groups of auto plants in such a way that a brake pad makers should be able to design and produce locally for up to 10 auto plants.
This would create reasonable demand that will induce long term investment. There should equally be long term international funding and local tactical funding like the defunct NAC levy with the beneficiaries including Innoson and Dunlop and others.
MIKE OCHONMA