The Managing Director of Honda Automobile Western Africa, Daisuke Mita, has attributed the stagnation of Nigeria's automotive industry to persistent foreign exchange volatility and the government's failure to implement a comprehensive automotive policy. In an interview with The Guardian in Lagos, Mita stated that these factors have created an unstable investment climate, deterring potential investors and hindering sector growth.
Forex Volatility and Policy Inconsistency
Mita acknowledged recent improvements in the foreign exchange market but noted that the exchange rate remains excessively high, negatively impacting business operations. He emphasized that policy inconsistency is a major concern for investors. The automotive policy introduced in 2014 was designed to run until 2024, but a new policy covering 2023 to 2033 was announced without proper evaluation of the first one. Neither policy has been signed into law, creating uncertainty due to the lack of a legally backed framework.
Shift in Government Focus
Mita pointed out that the government's attention has shifted towards emerging technologies like Compressed Natural Gas (CNG) conversion and electric vehicles, while local assemblers still struggle with conventional internal combustion engine vehicle production. This shift has further complicated the policy landscape.
Call for Action
To restore investor confidence, Mita called for the enactment of a comprehensive automotive policy that provides long-term protection for investments and encourages local manufacturing. He also urged stronger government support through patronage of locally assembled vehicles and the introduction of affordable vehicle financing schemes. Additionally, he advocated a gradual and structured approach to regulating used vehicle imports, particularly accidented vehicles, to support domestic assembly plants.
Optimism Despite Challenges
Despite the challenges, Mita expressed optimism about Nigeria's long-term potential, citing the country's growing population and strong market opportunities. He noted that there is still a huge transportation gap that needs to be addressed. Honda intends to expand its operations and introduce new products, but progress will depend on improvements in the policy and economic environment.
