The Evolution of Nigeria’s Automotive Sector
Globically, the automotive industry is undergoing a significant transformation. From traditional petrol-powered vehicles to electric vehicles (EVs) and driverless cars, this shift is reshaping the landscape of transportation. For Nigeria, this auto-revolution underscores the urgency for the country to catch up, adapt, and reposition its automotive sector as it celebrates 65 years of independence.
Nigeria has historically been a hub for vehicle assembly in Africa. Starting with the establishment of the first assembly plants in the late 1950s, the country saw the entry of Peugeot in Kaduna and Volkswagen in Lagos during the 1970s, followed by the Anambra Motor Manufacturing Company Limited (ANAMMCO) in 1977. Recently, companies like Innoson Vehicle Manufacturing (IVM) and Nord Automobile have further boosted the sector.
At its peak, the automotive sector provided thousands of jobs, enhanced local content, and stimulated ancillary industries such as tyres, batteries, and spare parts. This growth was supported by the National Automotive Design and Development Council (NADDC), established in 2014 under Act No. 83. Its mandate includes formulating the National Automotive Policy, recommending incentives, overseeing design and assembly programs, and encouraging local content in components.
Nigeria’s automotive sector has made modest progress, especially under the current administration. Recent policy interventions, revived institutions, and clearer regulatory signals from the Federal Government have contributed to the revival of local manufacturing. Joseph Osanipin, the Director-General of NADDC, emphasized boosting domestic production, increasing licensed assembly plants, and improving quantity per plant.
The annual production of locally assembled vehicles has risen from about 3,000-4,000 units to over 12,000 by the end of 2024. One notable policy is the “Nigeria First” initiative, which mandates federal ministries, departments, and agencies (MDAs) to procure Made-in-Nigeria goods, including vehicles and auto parts. This policy is seen as a critical step toward reviving local vehicle assembly and boosting economic development.
Stakeholders such as IVM and Dana Motors support the policy, believing it will generate demand and create jobs. Innocent Chukwuma, Chairman of IVM, noted that the policy could encourage patronage of locally made vehicles and help conserve foreign exchange. The Nigeria Automotive Manufacturers Association (NAMA) also welcomed the proposed Local Automobile Industry Patronage Bill, which aligns with the “Nigeria First” agenda.
Beyond policies, the NADDC has advanced efforts to increase local parts production. Osanipin emphasized the need to reduce reliance on imported components, noting that Nigeria can begin local manufacturing of spare parts. This would not only reduce import dependence but also create a viable supply chain that supports assembly plants.
The director-general also highlighted the importance of transitioning to alternative fuels like Compressed Natural Gas (CNG) and EVs, built on standards, safety, capacity building, and infrastructure. He stressed the need for national occupational standards to guide maintenance, retrofitting, and conversion of vehicles for CNG use, and for EV servicing.
Training and skills development are also key areas of focus. Osanipin announced the establishment of 21 Automotive Training Centres across Nigeria’s six geopolitical zones. These centres are equipped with state-of-the-art tools, including training for CNG conversion of petrol vehicles.
The council has partnered with the Bank of Industry (BOI) to explore financial mechanisms for local manufacturers. Stakeholders at the meeting emphasized the need for accessible funding to strengthen value chains and improve competitiveness.
Despite progress, challenges persist, including infrastructure gaps, financing issues, and policy inconsistency. Sen. John Enoh, Minister of State for Industry, pledged to work with the National Assembly to fast-track legislation to bolster investor protection and regulatory frameworks for the auto sector.
Industry experts believe the present administration’s renewed focus offers hope. By promoting local assembly, investing in component production, and ensuring sustained government patronage, the sector can reposition itself as a driver of industrial growth.
Opportunities remain, particularly through the African Continental Free Trade Area (AfCFTA), which provides a platform for Nigerian-made vehicles to reach wider markets. The global transition to electric and green mobility also opens space for innovation and investment.
Stakeholders agree that the path forward requires a coordinated push for policy stability, adapting to modern trends, infrastructure support, and innovative financing. With Nigeria’s large market and entrepreneurial base, the automotive industry can still deliver on its original promise of jobs, industrialisation, and mobility for millions.
