Amid growing capital flight through exit of some multinationals, Honda laments Nigeria’s harsh business environment
The only Original Equipment Manufacturer (OEM) in Nigeria, Honda Automobile Western Africa Limited, has lamented the harsh operating environment in Nigeria, saying over 8 years it opened its SKD assembly plant in Nigeria; it has never done over 40 percent of installed capacity. It however said that it has preserved in the face of the challenges and has not closed its assembly line, the company which had commissioned its motorcycle assembly arm in Ota, South West Nigeria 40 years ago.
Although, its production output has come down from its installed capacity of 1000 units of vehicles per annum, the auto firm maintains that it will continue to uphold its quality standard which it has been known for since its establishment in Nigeria 40 years ago.
Speaking during a media tour of its factory in Ota, Ogun State, Managing Director, HAWA, Takashi Nakajima, said among other operational difficulties, the company is currently experiencing challenges of foreign exchange and also the scarcity of dollars for purchase of goods and components for manufacturing.
According to him, the uncertainty of the auto policy is also a challenge, which is now under discussion, adding that the direction of the policy is not stable yet. Nakajima said as an Original Equipment Manufacturer (OEM), it needs some stimulation from the government for the market to increase.
For instance, he said: “90 percent of the market is used cars. If we have some regulations around new cars, it will help to build confidence in our business.” The company has an installed capacity of 1000 per year, which can be doubled if there is more patronage from customers and government.
“We have an installed capacity of 1000 per year and daily capacity to assemble 3 units per day. For now we are doing 50 per cent of the three units, that is, we do 1.5 units per day because of low sales and some other challenges.”
The Honda Managing Director said based on data gathered by individual efforts, the company has 10 per cent market share of the industry. He said the company is currently lacking patronage from the government which is an enabler of products produced locally.
“We are ready to supply the government. As the only OEM in Nigeria and only assembler in Ogun state, we expect some patronage from the state government though they have not shut their doors. Our sales have been more, to the Corporates.”
