… Some Chinese auto brands in Nigeria are JAC, GAC, Yutong, King Long, Chery, Changan, Dfm, BAW, Forland, FAW, Sinotruk,
Frank Kintum writes on how the Chinese have taken over the Nigeria auto market as well as the rail sectors.
It was Lee Iacocca, who, with William Novak, wrote about the American auto industry in 1984. In his autobiography, the former President of the Ford Motor Corporation of America, x-rayed his experience in the motor industry in the United States of America, especially about Ford.
Of interest as it relates to this topic, the former Ford boss whose father had migrated from Italy to USA in 1902, 410 years after the famous Christopher Columbus, is his discourse on the Japanese auto brands.
The motor man, in comparing the American auto industry with the then fledging Japanese auto industry, had reckoned that initially, the American market, and indeed the global industry did not take the Asian technology seriously.
However, he concluded by saying “when Japan started to rebuild after the war, its government targeted autos, steel, chemicals, shipbuilding and machinery manufacturing as critical industries….as a result, Japan’s auto industry has been wrapped in a cocoon of protection: government loans, accelerated depreciation, R&D assistance, protection from imports, and a prohibition against foreign investment.
“Because of this accelerated effort, Japan’s auto production has gone from a hundred thousand vehicles back in the mid-50s to eleven million today”. Today meant as far back as 1984.
What are the lessons here? Back then in 1984, the Chinese were nowhere on the world auto manufacturing map. China simple learnt from a combination of UAS, European and Japanese technology to develop their own industry. Today, according to the International Organisation of Motor Vehicles Manufacturers (OICA), the Japanese auto market accounts for about 9m vehicles produced last year, while the Chinese auto sector is put at 27m units produced last year. USA hovers around 11m.
Having garnered enough capacity, the Chinese started spreading their tentacles like the octopus, and Nigeria is one of the ready markets where the Chinese auto products have found firm footing.
Before the Chinese auto brands were finally accepted in the country, brands from the USA, Europe and Japan were the only ones around. Today the market is being shared with the Chinese brands. Hitherto, prominent auto distributing companies in the country would have nothing to do with the Chinese makes, but with the down turn in the economy (weakening purchasing power), and continues improvement of the Chinese technology, the vehicles started gaining grounds.
Today, most of the industry big players have embraced Chinese brands, the latest being Dana Motors, a company that popularised the Kia brand in Nigeria. The company recently introduced the DFM brand into the market. This is to be sold side by side with the Kia brand from Korea.
Before Dana, we had Stallion distributing the Changan; CFAO selling the King Long; Elizade AutoLand distributing the JAC passenger and light trucks; while Lanre Shittu sells the JAC heavy duty trucks.
Others are CIG Motors (selling GAC brand), promoted by the Chinese woman who has taken a chieftaincy title in Nigeria, Diana Chen; Chery, being sold by the Kewalram Chanrai group etc.
Import figures from the ports of entry are also not reliable due to corruption and irregularities and auto distributing companies are also not always ready to divulge sales figures. But it was gathered the imports from China is growing yearly currently put at about 20% of the passenger car market estimated at about 10,000 units.
Though all the auto companies that have embraced the Chinese brands are still holding on strongly to their original brands, it is believed that their marriage to these Chinese brands is a move to share from the low budget market segment which is currently active in the local market. So much about the auto sector.
The Chinese have also made significant in-roads into the local rail sector, courtesy of the Chinese Civil Engineering Construction Company (CCECC). The CCECC is currently handling the biggest rail project in Nigeria, that is the standard railway line gauge construction between Lagos and Ibadan. This is just the first phase as the project will extend to Kano thereafter.
The Lagos-Ibadan railway track project covers 156 kilometres at a provisional cost of $1.5b. The project is being partly funded by the federal government and by a foreign loan.
Beyond the construction, the Chinese are also given the contract for the coaches.
The Chairman, Nigerian Railway Corporation, Mallam Ibrahim Al- Hassan, recently said the federal government has taken delivery of two coaches to service the route. Al-Hassan made this known during a project inspection at Ologun Eru, on the outskirts of Ibadan, recently.
He added that the coaches were shipped in from China to start passenger services from Lagos to Ibadan as the laying of tracks had reached 152 kilometres out of the 156-kilometre stretch.
“The tracks have been laid up to 152 kilometres. It remains four kilometres to complete. The second track stops at 140 kilometres. I believe by the end of July, both tracks would be at the Ibadan station. We want to complete this as quickly as we can,” he said.
According to the Managing Director, NRC, Mr Fidet Okhiria, more coaches and locomotives will be procured to start operations on the Iju-Ibadan corridor while work continues on the Lagos end up to the Apapa station.
It would be recalled that the CCECC was also the company that built the Abuja-Kaduna standard railway track which was commissioned two years ago by President Mohamadu Buhari. The company is also involved in the biggest city railway project, being undertaken by the Lagos state government stretching from Marina to Okokomaiko.
Though Nigeria is not the only country embracing the Chinese technology, it is worrisome that the country is doing so with little or no value added in terms of incorporation of local raw materials.