Since the collapse of vehicle assembly plants in Nigeria, the automobile industry has relied heavily on importation of cars. However, there is an on-going effort by a local entrepreneur and Chairman of Innoson Group of companies, Mr. Innocent Chukwuma, to bring back the dream of making Nigeria an automobile manufacturing nation. In this interview with ADEDEJI ADEMIGBUJI, he reveals how Ghana and some other African countries are demanding for the locally-made cars and vehicle parts manufactured by his company.
Tell us how you started all these, what was your motivation?
I see myself as a business man. I started my business as a trader, selling motorcycle spare parts. After sometime, I started dealing on motorcycles and then moved to another area of business, which is plastic plant to support the motorcycle business. By this time, I was already assembling motorcycles in Nigeria and felt the need to have a plant that would support this by manufacturing the plastic components of my brands of motorcycles here in Nigeria rather than importing same. It was after this that I went into manufacturing of cars and other motor vehicles. By the time I started motorcycle manufacturing, there were just three or four companies that were in the business. These include, Leventis, which was importing Honda motorcycles and Boulos Group which was importing Suzuki as well as CFAO which had the Kawasaki franchise. There was also Yamaco for the Yamaha brands. At the time, buying motorcycles was rather very expensive and my studies showed that the high cost was because of costs associated with importation. Then, the importers were importing whole motorcycles in crates which contained just about 40 units in one container. My studies showed that I can pack over 200 motorcycles in one container; using the CKD model and that dropped my costs by as much as 40 percent. We then opened my plastic plants, my costs dropped significantly further. That was the beginning of the purchase of brand new motorcycles in Nigeria as against the growing trend of importing fairly used ones from other parts of the world. At this point too, brand new ones became cheaper than the fairly used ones and a revolution thus began. I also looked at the market and saw that our people are buying more of fairly used motor cars and that also inspired me to set up a car manufacturing plant in the country. A lot of people have the erroneous impression that what we do is mere assembling of vehicles but that is not correct. We manufacture many components of the cars here and that give great values to what we take to the market.
What items do you manufacture in the country?
Bumpers, dashboards and all other plastic components of our cars are made here in Nigeria. There are other components in addition to these ones that are being made for us by other factories in the country. We are looking at a near future when there would be other factories producing other components for us in the country so that we would just need to import very few items and that way, we would add more local value to what we produce.
When you were going into motor vehicle manufacturing, did you entertain fears that the big brands would make it hard for you to penetrate the market?
I knew all that. But I was also aware that, as they say, 'Rome was not built in a day'. I am also aware that there are other great brands that looked like late entrants but went ahead to upstage the so-called established brands. When we started, we were not bullish. We knew the challenges ahead and that was why we started on a very small scale, believing that we would grow when the market sees the values in what we are offering. And this has worked for us because we have been growing significantly since we entered the market and I can assure you that those heights the likes of Honda, Toyota and others have been able to reach, we will also get there one day. Remember that before now, there were more German and French cars in Nigeria. In those days, we knew only of Mercedes Benz, Renault and Peugeot. But the Japanese cars came in and have been able to make impact. Today, Korean and even Chinese cars are doing very well in Nigeria. So what they are doing to be successful is also what we would do and be even more successful.
Was it difficult for you to make any initial impact when you started?
The important thing for us then was quality assurance. We had it at the back of our mind that when something is good, people would want to buy them and when they buy and get good value, they tell others and before you know it, everyone is at your doorstep seeking to be a part of the good news. I have global benchmarks of standard driving our brands and having ensured this, I was sure the market would be there for us and so far, we have not been disappointed.
Where is your market? Does it extend beyond Nigeria?
We are in various parts of Africa at the moment. For instance, our vehicles are now bought and sold in Ghana. We are selling in Cote d'Ivoire, Mali. In Chad, there are Innoson vehicles. And the interesting thing is that in these countries, our vehicles are well accepted you would think we had been in the market for several decades. Their satisfaction is not just from the mere fact that we were able to give them good quality motor vehicles. They take pride in the fact that this is an African initiative that might be a test case for the kind of leapfrog the continent could witness if all talents are harnessed towards that purpose. In other African countries where we have sold these vehicles, the joy that we have seen is greater than what was the case in our home market, Nigeria.
How many units of these vehicles have you been able to sell since this project started?
The number is quite huge, to be modest. And I will give you this explanation. Our production capacity is 300 units of different models of motor vehicles monthly. So if you realise that we have been in this business since 2007, I am sure you should have an idea of just how much we have done. In essence, it means that we would have sold close to 30,000 units of vehicles since we began. The interesting thing is that we do not produce to stock and sell. We produce according to demand and supply as soon as we roll them off our production line.
Given your level of success, what do you think is responsible for over dependence on importation in the country? Why are others are not manufacturing?
I think there is a lot of confusion in Nigeria. The fact is that most of us are not alive to the fact that there is no one outside the country that can develop this country except Nigerians. We have kept looking outside the shores of the country for development direction when we should be looking inwards to determine our own peculiar development imperatives and design such the way it would suit us. We have Indians and Chinese all over the country masquerading as foreign investors but these are just business men that are interested in how much they can earn here and repatriate to their home countries. I am sure you are aware that the present government has many initiative designed to make Nigeria an industrial haven. They are doing so many things to encourage local enterprise. They are providing avenues for local capacity building in so many areas, especially manufacturing.
But people have been complaining that lack of infrastructure, lax security and cost of funds impede industrialization?
Let me make it clear here, while I acknowledge that there are impediments to industrialization in terms of cost of credit, poor infrastructure and many other factors, I am also of the view that those are not great stumbling blocks because if you check the cost of importation, you find out that it pales in significance when you compare it with the added values that manufacturing in the country has to offer to both the business man and the market. I give you an instance; when I started my manufacturing business, the country was no better in terms of either infrastructure or cost of funds or even security. I built the foundation of this business on poor infrastructure and factored all of them in the business plan and I know that there are still great opportunities. We are even witnessing improvement, especially in the area of power generation. This means that if it further improves, we are at a greater advantage. The point to note is that in those countries where we import from, the cost of production is also high in many other areas. For instance, in Japan, the cost of manpower is significantly high when compared to what we have here. You have to pay huge salary to staff and that is relatively speaking, not the case here. If you convert the average salary of the Nigerian employer to dollar, it is nothing compared to what the Japanese earn. So when you spread the differential across cost areas like power in the case of Nigeria, everything evens out.
What about cost of credit?
I am one of those that believe that Nigerian banks are designed not to support industrialisation. Any manufacturer that depends on the regular banking system for credit support is doomed to failure. I am sure that was why the government in its wisdom, set up the Bank of Industry (BoI). As far as I am concerned, it is only the Bank of Industry that can support any industrialist and help him or her to succeed. In our relationship with this institution, we have been able to get all the support we need. There is nothing we need that BoI has not been able to give us. What they need is just for you to have a proper repayment plan and traffic. Once you do this, they will make sure your business grows and prospers. They will help you source for equipment and plant facilities.
Has government supported you in any way?
The government has been of help to us in many ways. I have not gone to them for any issue without getting their listening ear. We were able to bet some form of tax rebate in motor manufacturing. There has also been patronage from them in terms of purchase of our vehicles and this has helped a lot. But we have also not been dependent of government handouts in driving this project. In the market, I can tell you for instance that we have sold more of our cars to private individuals than government.
What have you done to ensure that this brand survives from generation to generation just like others in the advanced world?
Yes. It may interest to know that I am not the only one behind the Innoson dream. There are other people that are part of this vision and all of us are working to ensure that we leave a legacy that will survive generations. We are mere mortals and do make plans of our own but God is the final voice in everything. We have structured Innoson right from the onset to ensure generational relevance. For instance, I have refrained from making this the regular family business that Nigerians are familiar with. As we speak, I am the only person in my family that is working in this group and it is a deliberate strategy to exert high standards of performance and raise managers who will drive the vision beyond family boundaries
What has been your biggest challenge as a manufacturer?
I am not really challenged by the regular thing that people moan about daily in Nigeria. People complain about so many things, including those that they could naturally have the capacity to overcome. It is popular for people in my type of business to scream about power and infrastructure. But for us here, those are not real challenges. Our challenge here is mainly on how to keep the factory optimally busy because when they are busy working, we will remain in business. If there is anything that will create some kind of downtime in any of our production plants, that is what I call a challenge.
What is your workforce like?
We have in our employment, 7,400 people
What about spares and servicing?
We did not start this project by accident. Right from the onset, we set planning for it to be sustainable and put structures in place to ensure the availability of spare parts across the various markets where we are selling our brands. If you are a proud owner of any of our vehicles anywhere in the country, spares are available at convenient distances. Our spare parts are just as conveniently available as the popular Japanese vehicles you have on the street. We have also ensured that our vehicles are designed in ways the average motor mechanic would be able to understand easily and be able to fix any damages. We have also gone to the extent of training most of them on how to handle any issue of mechanical breakdown so that our customers can continually get the satisfaction of driving in our vehicles. Where do you see this brand in the next 50 years?
What you must understand is that our growth target is for the long haul. And our environment is not just Nigeria but the entire Africa. We are positioning Innoson Group to be the king in Africa, especially in the area of motor manufacturing. We will be all over Africa, satisfying their desire for a truly African automobile brand capable of giving the same utility as those imported from Europe, America and Asia. And from our footprints on some parts of the continent so far, we believe this is achievable.
