Nigeria is set to revolutionize its automotive industry by transitioning from Semi-Knock Down (SKD) to Completely Knock Down (CKD) vehicle assembly. This move, spearheaded by the National Automotive Design and Development Council (NADDC), aims to enhance local manufacturing capabilities and reduce dependency on imported vehicle parts. The initiative is expected to boost the economy, create jobs, and promote the use of made-in-Nigeria components in vehicle production.
Enhancing Local Manufacturing Capabilities
The transition from SKD to CKD is a significant step towards strengthening Nigeria’s automotive sector. By moving to CKD, the country aims to assemble vehicles from completely disassembled parts, which will be sourced locally. This shift is expected to reduce the cost of vehicle production and increase the competitiveness of Nigerian-made vehicles in the global market.
The Director General of NADDC, Joseph Osanipin, emphasized the importance of this transition during a recent visit to Lanre Shittu Motors (LSM) in Lagos. He highlighted the company’s capacity and capability in the pickup and truck segment, which will be crucial in the CKD process. Osanipin also noted that the adoption of Compressed Natural Gas (CNG) for vehicles is a key part of this transition, as it offers a cheaper and more sustainable alternative to petrol.
Local manufacturers are optimistic about the potential benefits of this transition. The Managing Director of LSM, Taiwo Shittu, expressed confidence in the company’s ability to meet the demands of CKD production. He also highlighted the company’s proactive approach to the CNG space, which aligns with the government’s vision for a greener automotive industry.
Economic and Employment Benefits
The shift to CKD vehicle assembly is expected to have a positive impact on Nigeria’s economy. By increasing local production, the country can reduce its reliance on imported vehicle parts, which will save foreign exchange and boost the local economy. Additionally, the use of made-in-Nigeria components will create a ripple effect, stimulating growth in related industries such as steel, rubber, and electronics.
Job creation is another significant benefit of this transition. The CKD process requires a higher level of technical expertise and labor compared to SKD assembly. This will lead to the creation of new jobs in the automotive sector, as well as in supporting industries. The NADDC is committed to developing the necessary human capital to support this transition, with a focus on training and capacity building.
The government’s support for local manufacturers is crucial in ensuring the success of this initiative. By providing incentives and creating a conducive environment for business, the government can encourage more companies to invest in CKD production. This will not only boost the automotive industry but also contribute to the overall economic development of the country.
Promoting Made-in-Nigeria Components
One of the key objectives of the transition to CKD is to promote the use of made-in-Nigeria components in vehicle production. This aligns with the government’s broader goal of achieving self-sufficiency in various sectors of the economy. By encouraging local manufacturers to produce vehicle parts, the government aims to reduce dependency on imports and enhance the quality of Nigerian-made vehicles.
The NADDC is working closely with local manufacturers to ensure that they have the necessary support and resources to produce high-quality components. This includes providing technical assistance, facilitating access to finance, and promoting research and development. The council is also advocating for policies that will protect and promote local manufacturers, such as tariffs on imported vehicle parts and incentives for companies that use locally sourced materials.
The success of this initiative will depend on the collaboration between the government, local manufacturers, and other stakeholders. By working together, they can create a sustainable and competitive automotive industry that benefits the entire country. The transition to CKD is a bold step towards achieving this vision, and it holds great promise for the future of Nigeria’s automotive sector.
