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Nissan is set to become the first major car-maker to open a factory in Nigeria following a legislation change........ Nissan's Patrol SUV is expected to become the first vehicle manufactured in Nigeria
Engineering and Technology Magazine (E&T)
October 9, 2013
Signing a Memorandum of Understanding with West African conglomerate Stallion Group, Nissan is now waiting for Nigerian government to give a final approval to the new Automobile Industrial Policy, designed to encourage development of the automotive industry in Nigeria.
The company believes the Lagos-based facility could become a future hub for Nissan’s expansion in Africa.
As a part of the project, Nissan will expand Stallion’s facility in Lagos, aiming at annual production capacity of 45,000 vehicles, involving a range of cars including light duty trucks, pickups and vans.
It is believed the first car, probably a Nissan patrol SUV, will leave the Nigerian production line in the spring of 2014.
Capacity at the plant will also be opened to Nissan's Alliance partner Renault, to be utilised according to future business needs.
"We welcome the proactive measures being taken by the Government of Nigeria to encourage inward investment and job creation driven by local auto manufacturing,” said Nissan’s President and CEO Carlos Ghosn. “Together with our local partner, Nissan is preparing to make Nigeria a significant manufacturing hub in Africa. As the first-mover in Nigeria, we are positioned for the long-term growth in this market and across the broader continent," he said.
Nigeria, which imports millions of dollars worth of new and used cars into the country every year, has embarked on a drive to attract manufacturing and industrial investments into the country since former Goldman Sachs banker Olusegun Aganga was made minister of trade and investment this year.
While it is sub-Saharan Africa’s biggest recipient of foreign investment with roughly $7bn last year, or about 14 per cent of the region’s total, investors complain that Nigeria remains a challenging destination for industrial ventures because of a lack of power supply, 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 recent decades in India, China and southeast Asia.
The UN Conference on Trade and Development puts Nigeria as the fourth-best destination for foreign direct investment when measured by returns, only behind Angola, Bahrain and Kyrgyzstan. Unctad estimates that FDI projects returned on average 36 per cent in Nigeria in 2011, compared with an average for emerging markets of 8.4 per cent.
Volkswagen and Peugeot previously built cars in Nigeria but have since closed factories.