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Ford to start Ranger assembly in Nigeria

Jeff Nemeth and Cosmas Maduka with a new Ranger

Jeff Nemeth and Cosmas Maduka with a new Ranger

12th August 2015

By: Irma Venter

Creamer Media Senior Deputy Editor

  

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US vehicle manufacturer Ford on Tuesday announced that it would assemble its Ranger pickup in Nigeria, starting in October.

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

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

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

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

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

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

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

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

The US auto maker this week 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,” noted Nemeth.

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

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

A number of Chinese companies also assembled 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, said Nemeth.

He said the South African automotive industry could look at Tuesday’s 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 was also positive that new Nigerian president, Muhammadu Buhari, elected this year, would continue with the auto policy as impemented by his predecessor, Goodluck Jonathan.

Enormous Potential
Coscharis Group president and CEO Cosmas Maduka said it was “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 extended only to the Ranger, Maduka said he would like to expand local assembly to include sports-utility vehicles.

The 40-year-old Coscharis Group had 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 noted 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 had 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 was equally optimistic that Buhari’s adminstration would continue to enforce legislation that could 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 estimated 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 faced an influx of almost-new, so-called grey vehicle imports that flooded the market, limiting new vehicle sales.

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

However, if the Nigerian government “showed commitment" to its policies through, for example, tighter border control to better manage grey vehicle imports, the new car market could grow to between 200 000 and 300 000 cars a year, he added.

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

Nemeth said Ford had been encouraging the Nigerian government to develop a comprehensive industrial policy, so it could have a fully-fledged automotive industry.

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

 

Edited by Creamer Media Reporter

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