IMPACTS OF INNOSON VEHICLES IN THE NIGERIAN ECONOMY

By Cornel Osigwe

“On the day I took office, our auto industry was on the verge of collapse. Some even said we should let it die. With a million jobs at stake, I refused to let that happen. In exchange for help, we demanded responsibility…… Today, General Motors is back on top as the world’s number one automaker. Chrysler has grown faster in the U.S. than any major car company. Ford is investing billions in U.S. plants and factories. And together, the entire industry added nearly 160,000 jobs.” President Obama on his 2016 State of the Union Address.

When President Obama took office, the American economy was deep in recession and financial crisis, the American automobile industry was on the brink of collapse and liquidation that threatened to eliminate more than one million jobs.

The President, as part of a larger effort to combat a historic economic crisis, made a difficult decision to provide support to General Motors (GM) and Chrysler. The President’s decision to save GM and Chrysler was about more than those two companies. It was about standing behind the countless workers, communities, and businesses – large and small – that depend on the automotive industry.

Within two years, the American auto industry mounted a comeback: General Motors expanded its production and added more jobs, while Chrysler repaid its outstanding loans to the U.S. Treasury – six years ahead of schedule. Since GM and Chrysler emerged from bankruptcy, the auto industry has created more than 200,000 jobs (its strongest period of job growth since the late 1990s). GM, Ford and Chrysler have all returned to profitability and much more boosted the American economy.

Recently, the German Chancellor, Angela Merkel visited Nigeria and before her visit, The Nigerian Ambassador to Germany, Yusuf Tuggar, said the Chancellor’s visit to Nigeria was to explore investment opportunities in Nigeria. One of the high points of her visit was the signing of a memorandum of understanding (MoU) between Nigeria and German Automobile manufacturer, Volkswagen, to turn the country into the “automotive hub” of West Africa.

According to a statement by Volkswagen after signing the MOU, “the agreement will see new plants being built in both countries, thereby expanding the automobile market in the continent”.

One wonders what the interest and contribution of Nigeria are to the expansion of Volkswagen, a German based automobile manufacturing company when little has been done by the government to see the country first indigenous vehicle manufacturing company – Innoson Vehicles – succeed.

Imagine the impact Innoson Vehicles will make in Nigeria if the Government invests and supports it just the way Obama did to the major vehicle manufacturing companies in America at the beginning of his administration or the way the German Chancellor promotes her country’s privately-owned vehicle manufacturing companies in other countries.

The Nigerian Government should learn to invest and support its indigenous companies, as that is the major panacea to a healthy economic growth and development.
The following will be the impact of Innoson Vehicles on the economy if adequately supported by the government:

Creation of Supplier industries: The auto industry is known as the industry of industries because it has the capacity to birth tens to hundreds of other industries known as supplier industries. No auto industry has the capacity to produce 100% of all its auto parts. In fact, the majority of the auto parts are produced by other smaller industries.

Innoson Partners With Shell For The Supply Of Vehicles (Photos)(Opens in a new browser tab)

Nigeria is still an emerging auto industry and the majority of the auto parts are still imported into the country. With a massive support and patronage of Innoson Vehicles by the government, there will definitely be an outbreak of clusters of supplier industries such as:

· Auto Parts manufacturing Companies.
· Gasoline and engine parts manufacturing Companies.
· Electrical and electronic equipment manufacturing Companies.
· Steering and suspension components manufacturing Companies.
· Brake system manufacturing Companies.
· Transmission and power train parts manufacturing Companies.
· Seating and interior trim manufacturing Companies.
· Metal stamping Companies.

With the establishment of these manufacturing companies, Nigeria will be the major hub of auto manufacturing companies in Africa with the attendant benefits of thousands of jobs generated, auto and spare parts exports, the generation of foreign exchange etc.

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