Why Automobile Companies Collapsed In Nigeria – Minister


Absence of ‘developmental research’ is to blame for collapse of automobile companies in Nigeria, said Dr. Ogbonnaya Onu, Minister of Science and Technology. The Minister made the observation yesterday, when the management team of Peugeot Automobile Nigeria (PAN) paid him a courtesy visit in his office.

Recalling the positive economic impacts automobile companies made in the country back in the 80’s and 90’s, Dr. Onu noted that all automobile companies in existence then, collapsed because of failure to invest on advanced research and development projects.

He therefore called on the surviving and new automobile industries in Nigeria to invest in developmental research efforts that will enable them withstand developments that may arise as a result of competitions and unforeseen market forces.

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He noted that every successful multinationals companies all over the world always site research institute in their laboratory and factory to enable them plan and carry out their developmental projects.

The Minister who tasked the auto companies to ensure 40 per cent inclusion of local content, pledged Federal Government’s commitment to support the sector in creating jobs, retain existing one, create wealth and diversify the economy, insisting they must source their component locally in line with the policy thrust of the present administration.

For him, this would bring many small scale industries that would supply the component and also build capacity.

He however, appealed to Nigerians to look inward and patronize locally made goods, to enable the local companies survive, describing the nation’s population as an added advantage for the auto manufacturers.

Earlier in his address, the Managing Director/CEO of PAN, Ibrahim Boyi, told the Minister that PAN is the only automobile company in Nigeria that remains in operation till date and wants active government policy for its continued survival.

He disclosed that PAN was set up in 1972 through joint venture between the Federal Government of Nigeria and Peugeot Automobile of France as part of government deliberate policy to boost industrialization.

Boyi also informed that the Company which produced reliable vehicles in the past and also achieved 40 per cent local content in the 80’s has assembled two plants locally.

He added that the company is not only interested in creating employment and entrepreneurs by training youths in the society but also committed to reducing cost of ownership for their customers and also embark on community Social Responsibility Programme.

As a way forward, the PAN revealed that the company had packaged ICT back up training programme and are looking for organization that share the same commitment for partnership to open garage across the country for the training of youths on the skills required to manage the new products.

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