By Moses Akaigwe
Mikano Motors, one of Nigeria’s fastest-growing auto assembly and marketing companies, has disclosed plans to migrate from its current Semi-Knocked Down (SKD) vehicle assembly operation to a deeper and more technologically demanding Complete Knocked Down (CKD) manufacturing operation.
The National Operations Manager of Mikano Motors, Syam Abdulkadir, disclosed this during a recent oversight visit to the company’s assembly plant along the Lagos-Ibadan Expressway in Warewa, on the outskirts of Lagos.
According to him, Mikano Motors, which holds the franchise for Changan (including Deepal) and Maxus vehicles in Nigeria, could assemble between 15,000 and 20,000 vehicles annually, but actual demand in the auto market remained below the company’s production capability.
The making of a Changan SUV at Mikano Motors’ Karameh Industrial City at Warewa, on the outskirts of Lagos
“We have 100 per cent capacity to meet the demands of consumers. One of the reasons is because we are engaged in consistent production daily,” he said.
Abdulkadir said increased patronage of locally assembled vehicles would provide the investment justification for manufacturers such as Mikano to deepen localisation and transition to CKD production.
“Right now, we have an SKD assembly plant. In the near future, we plan to do CKD. Once we have CKD, we will have a larger capacity to produce more vehicles for our customers,” he said.
He commended NADDC for its support towards the gradual development of local automotive manufacturing, stressing that sustained market demand would be critical to unlocking further investment in assembly capacity and local component production.
The Mikano Motors executive also identified vehicle financing and trade-in arrangements as part of the company’s strategy to improve affordability and stimulate demand for locally assembled vehicles.
He explained that the company operates a trade-in system under which customers can return previously purchased vehicles when upgrading to newer models.
Because Mikano Motors maintains the vehicles’ service and warranty histories, he said, the returned vehicles can subsequently be channelled into the more affordable used-vehicle market.
“In terms of incentives, we offer our own used vehicles. In Mikano Motors, for example, we have the trading options, which means that if a customer buys a vehicle from us today and, in a year or two, decides to trade the vehicle because they want a different model, we are able to take that vehicle back.
“Already, we have the history of the vehicle, service history, the warranty and others. With this, we are able to sell to somebody who is looking for more affordable vehicles.”
On local content, Abdulkadir disclosed that Mikano had previously manufactured high-quality brake pads locally but was forced to discontinue production because imported alternatives were being sold below the cost of local manufacture.
He said the price differential made it difficult for locally produced components to compete, despite their higher quality and durability.
“We will be more into local content production beyond the brake pads with future support,” he said.
The Director-General of NADDC, Otunba Oluwemimo Joseph Osanipin, said the visit was designed to give the council’s Governing Board first-hand knowledge of the plant’s operations, production capacity and challenges.
Osanipin specifically cited Mikano Motors’ former brake-pad manufacturing operation as an example of the competitive pressure confronting local component manufacturers.
He said the locally produced brake pads were of higher quality but sold at about N10,000, compared with imported alternatives costing about N2,400, contributing to the eventual closure of the local production line.
“Mikano has one of the best brake pads in the country,” the DG said, adding that the experience would inform ongoing work on an automotive industry bill.
He said the council was examining measures that could create a more sustainable operating environment for local component manufacturers and vehicle assemblers.
Also speaking, the Chairman of the NADDC Governing Board, Chief Emma Eneukwu, said the visit demonstrated that Nigeria possessed the human capacity required to deepen domestic automobile production.
He observed that the workforce at the Mikano plant was predominantly Nigerian, with employees gaining practical knowledge of vehicle assembly, production processes and manufacturing requirements.
Eneukwu called for stronger policy support for locally manufactured components and vehicles, arguing that manufacturers would struggle to compete where imported vehicles and components enjoyed significant cost advantages.
He also advocated measures to regulate the importation of used vehicles, including consideration of age limits, as part of efforts to protect domestic manufacturing and encourage investment in local production.
According to him, failure to establish appropriate industry protection mechanisms could undermine the viability of local assembly plants because imported vehicles could enter the market at prices below those of locally produced units.
Eneukwu said the NADDC Governing Board would use the information gathered during the factory visit to intensify efforts towards the actualisation of an automotive industry law.
He said such legislation was necessary to provide a more predictable policy framework for investment, local content development and the survival of Nigeria’s automotive manufacturing base.
The post Mikano Motors targets SKD-to-CKD transition, seeks increased patronage of Changan, Maxus vehicles appeared first on The Sun Nigeria.
