Business
Honda assembles latest HR-V in Nigeria, blames grey imports, inconsistent policy for low patronage
Honda Automobile West Africa (Nigeria), subsidiary of Honda Motor Co., Ltd, Japan, says it is assembling the 2023 Honda CR-V and other products from the Japanese auto giants, it however blames low patronage on grey imports, fairly used cars and inconsistent policies on the part of the government.
Speaking during a media tour of its factory in Ota, Ogun state, Managing Director, HAWA, Takashi Nakajima, said the Honda HR-V assembled in the factory takes into account the peculiar nature of Nigeria’s roads and environment.
He said the model assembled in Nigeria has more ground clearance.
“The 2023 edition has been known to pack a ton of utility and clever features into a compact package. And for 2023 it’s been completely redesigned. It’s larger, more refined and more sophisticated-looking inside and out. But sadly, our production capacity is low due to the grey import market and low patronage by governments patronage in Nigeria,”
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According to him, among other operational difficulties are the 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 per cent of the market is used cars. If we have some regulations around new cars, it will help to build confidence in our business.”
“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”.
“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”.
“There is something about popularity acceptance. Government as enabler determines what citizens will do, which trickles down to what consumers buy. As an OEM, our quality is guaranteed and our relationship with every customer is the same”.
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He said that although 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 44 years ago.
Takashi, who stated that the company is the sole Distributor of New Honda cars, HGMO, and Genuine Honda Spare parts in Nigeria, said Honda Automobile West Africa (Nigeria) is the first Honda assembly plant for vehicle assembly in Africa.
Speaking on the level of local professionals working in the factory, Remi Adams, Head, Sales Marketing and Logistics at HAWA said the ratio is 99 per cent Nigerians to one foreigner. “You will see Nigerians everywhere. Once the experts are here to transfer technology they go back.”
He said that the company tried to source material locally but most of the materials are not up to quality.
“As Honda, we can say the major action that the federal government needs now is to hire a purchase schemeI with a single digit interest rate. This was the promise made by the govt before we set up assembly operation, all we ask for now is for the govt to fulfill its promise”.
On expansion into gas-powered and electric-powered vehicles, he said: “In Nigeria, the said HAWA is not yet considering electric vehicles because the standards and infrastructure are not in place with the technical know-how.”
The company started the importation of Brand New Honda cars in late 2013 and moved on to add importation of Honda Genuine Motor Oil (HGMO) and Genuine Honda Spare parts to its line in early 2014.
In view of the Auto Policy, it started the project of Semi Knock Down (SKD) Assembly plant in Ota, Ogun State in 2015.
The factory produced and launched the 1st SKD Honda ACCORD assembled in Nigeria on 10th of July, 2015, after attaining the status of Recognized Manufacturer/Assembler of Vehicles.