Nissan will become the first global carmaker to build cars in Nigeria since west Africa’s largest economy rolled out a policy to tempt investors to its nascent automotive industry, write Henry Foy and Javier Blas.
The Japanese carmaker, which has aggressively identified growth in emerging markets as the centrepiece of its global strategy, plans to build 45,000 cars a year in the country, probably starting with an SUV early next year.
Nissan, which last month announced it would be the first international carmaker to build vehicles in Myanmar, wants to double sales in Africa to 220,000 a year by 2016.
Nigeria, which imports millions of dollars worth of new and used cars every year, has embarked on a drive to attract industrial and manufacturing investments into the country since former Goldman Sachs banker Olusegun Aganga was made minister of trade and investment this year. While Nigeria is sub Saharan Africa’s biggest recipient of foreign investment with about $7bn last year, or 14 per cent of the region’s total, investors complain that the country remains a challenging destination for industrial ventures due to power shortages, poor transport infrastructure and an unskilled labour force.
African countries, long overlooked by global carmakers, are seen as one of the last remaining untapped sources of growth for the industry, after heavy investments in India, China and southeast Asia. “Nissan is preparing to make Nigeria a significant manufacturing hub in Africa,” said chief executive Carlos Ghosn, the global car industry’s most prominent believer in emerging market potential. “As the firstmover in Nigeria, we are positioned for the longterm growth of this market and across the broader continent.”
The UN Conference on Trade and Development ranks Nigeria as fourthbest destination for foreign direct investment measured by returns after Angola, Bahrain and Kyrgyzstan. Unctad reckons FDI projects returned on average 36 per cent in Nigeria in 2011, against an emerging markets average of 8.4 per cent. Volkswagen and Peugeot built cars in Nigeria but have since closed factories. Nissan and French partner Renault signed a memorandum of understanding with the Nigerian company Stallion Group to begin vehicle assembly in Lagos, the two company alliance said yesterday.