US vehicle manufacturer Ford will assemble its Ranger pickup in Nigeria, starting in October.

The plant will be Ford’s first African production location outside South Africa, says Ford Motor Company Sub-Saharan Africa president and CEO Jeff Nemeth.

Ford has partnered with Ford dealer group Coscharis Motors on the assembly project.

Nemeth does not want to disclose the shareholding or dollar-value of the venture.

Ranger assembly will begin in Ikeja, in the Lagos State, about 750 km south-west of the Nigerian capital Abuja.

The Ikeja plant will create around 180 jobs directly and indirectly, and will have the capacity to assemble up to 5 000 units a year.

Vehicles produced at the plant are destined for sale in Nigeria only.

Ford will assemble the Ranger at a semi-knockdown (SKD) level, using body parts and components imported from South Africa.

Ford produces the Ranger in Pretoria, South Africa, for export to 148 countries, while the company also manufactured engines at a Port Elizabeth facility.

The US auto maker in August produced its 250 000th Ranger at its Pretoria operation.

“Nigeria is a priority market for us in sub-Saharan Africa and today’s announcement will allow us to better serve our customers, both from a retail point of view, and in terms of vehicle and parts availability,” notes Nemeth.

Ford’s decision on local assembly in Nigeria follows that of Japanese auto maker, Nissan, which set up a similar SKD operation two years ago. Both companies’ actions have been prompted by a new duty regime that strongly favoured vehicle assembly in Nigeria over vehicle imports.

The Nissan Nigerian facility is also, in part, supplied from its South African operation.

A number of Chinese companies also assembles pickups in Nigeria.

Ford in 2014 sold around 4 000 new vehicles in Nigeria, with the Ranger making up around 50% to 60% of this number, says Nemeth.

He says the South African automotive industry could look at the Nigeria announcement as a glass-half-empty, in that the Ranger used to be exported from South Africa to Nigeria, or as a glass-half-full, with the South African plant at full capacity, and with Ford and its South African suppliers able to grow their footprint in Africa.

Nemeth is also positive that new Nigerian president, Muhammadu Buhari, elected this year, will continue with the auto policy as impemented by his predecessor, Goodluck Jonathan.

'Enormous Potential'
Coscharis Group president and CEO Cosmas Maduka says it is “a dream finally come true” to see Ford assemble vehicles in Nigeria.

“It is an important market that no serious player can ignore.”

While the Coscharis Group’s deal with Ford extends only to the Ranger, Maduka said he will like to expand local assembly to include sports-utility vehicles.

The 40-year-old Coscharis Group has interests in a number of industries, such as in the banking, manufacturing and the automotive sectors of the Nigerian economy.

Coscharis Motors, part of the Coscharis Group, started operations in 1983, importing and distributing automotive spare parts and accessories. In 2001, Coscharis Motors expanded into the sale of Ford vehicles.

Maduka notes that it was “an exciting, surprising” moment when Goodluck Jonathan peacefully handed over power to a new regime following the elections earlier this year.

Nigeria’s history has been punctuated by dictatorships and violent coups.

“We have been pinned down by leadership for so long. There is something new hapenning in our part of the world. I’m really excited.”

Maduka is equally optimistic that Buhari’s adminstration will continue to enforce legislation that will rebuild Nigeria’s automotive industry.

“We cannot be one of the most populous countries on earth and not have an automotive industry.

“The potential of our market is enormous and untapped.”

Maduka estimates the new car market in Nigeria at around 120 000 units a year, with the used car market at 560 000 units a year.

Nigeria faces an influx of almost-new, so-called grey vehicle imports, limiting new vehicle sales.

Maduka acknowledged that these imports are an obstacle to increasing the sales of new vehicles and, ultimately, establishing a local automotive manufacturing sector.

However, if the Nigerian government “shows commitment” to its policies through, for example, tighter border control to better manage grey imports, the new car market can grow to between 200 000 and 300 000 cars a year, he adds.

A market of this size will ensure that component makers also set up shop in Nigeria, increasing the local content on vehicles assembled in the West African country, says Maduka.

Nemeth says Ford has been encouraging the Nigerian government to develop a comprehensive industrial policy, so it may have a fully-fledged automotive industry.

There are currently no incentives to lure automotive suppliers to Nigeria.