US MOTOR company Ford will start assembling Ranger trucks in Nigeria later this year, in a decision that could double the number of vehicle kits supplied to that country from SA.
Nigeria will become the first African country outside SA to assemble Ford vehicles.
Ford SA’s Silverton plant, in Pretoria, has annual capacity for 110,000 Rangers and is working overtime to meet domestic and export demand.
Nigeria is one of nearly 150 export markets for built-up Rangers, but from October, Silverton will export kits for re-assembly in that country.
Jeff Nemeth, president of Ford’s sub-Saharan Africa region, said on Tuesday Silverton expected to ship up to 5,000 vehicles annually to the new plant, near Lagos. Last year, sales of new Ford vehicles in Nigeria totalled about 4,000, with SA-built Rangers accounting for more than half.
Ford’s partner on the project is its Nigerian retail distributor, Coscharis Motors. The Coscharis Group, to which it belongs, has no automotive manufacturing experience besides assembling Indian motorcycle kits. President Cosmas Maduka said the group was also active in pharmaceuticals.
Other multinational motor companies have announced plans for Nigerian assembly this year but have mainly opted for partners with assembly backgrounds. One Nigerian company is partner to multiple foreign investors.
Mr Nemeth said Ford wanted a partner it knew. The US company would take full responsibility for manufacturing and quality in the new plant. "The quality of vehicles coming from Nigeria will be exactly the same as we build in SA," he said. "We want a company that works as we want it to, not one that dictates to us."
He declined to disclose the value of the investment or the ownership split with Ford.
Mr Maduka said he hoped Nigerian component suppliers would start supplying parts for the Ranger by 2017. "There are existing suppliers but are they able to meet Ford quality standards? It will take time," he said.
Mr Nemeth said Ford would encourage development of a Nigeria supply industry. He insisted that a second Ford plant in Africa was not a threat to SA.
In any case, said Mr Maduka, Ford and other companies could not ignore Nigeria. It was Africa’s biggest economy, with a huge population, and yet its new-vehicle market was dwarfed by sales of used vehicles.
Nigeria’s potential had always been there, said Mr Maduka, but foreign investors had been put off by decades of political violence and uncertainty. This year’s peaceful handover of power by former president Goodluck Jonathan to his successor, Muhammadu Buhari, had changed perceptions. "People have begun to think there may be an end to the turmoil," he said.
