The plan to establish Peugeot Automobile Nigeria Limited (PAN) was conceived in 1969 by the military government of General Yakubu Gowon. The process to set up the company attracted 16 vehicle manufacturers which tendered their proposals for the establishment of an assembly plant in the country. Eventually, AP France clinched the deal on May 7, 1971. After all the necessary machineries were put in place at its assembly plant in Kaduna, PAN commenced operations on March 2, 1975, with an annual production output of 60,000 cars. By 1980, its annual output had shot up to 90,000, with about 37 percent local content. All over the country, PAN’s products became the most popular and it enjoyed huge patronage from individuals, corporate organizations and governments.
The privatization of Peugeot Automobile Nigeria Limited in 2006 with ASD Motors its core investor was expected to propel the company forward and make it stronger and more competitive. Ironically, the company’s fortune took a nose-dive. Instead of the expected quantum leap in performance, there was an accumulation of huge non-performing loans (NPL) to banks. This development made the Asset Management Company of Nigeria (AMCON) to acquire the debts of the company and converted a portion to equity to help restructure the firm in October 2012.
Despite all the efforts put in place to keep the company afloat, PAN’s fortunes continued to dwindle. Some analysts blamed the importation of cars, including used (Tokunbo) vehicles which flooded the country as being responsible for the demise of the indigenous auto companies. As prospective customers went for used imported cars, indigenous automobile manufacturers experienced low patronage, which eventually made it difficult for them to stay afloat. This development and other factors led to the collapse of the auto industry in Nigeria.
In its bid to stage a comeback and consolidate its position as Nigeria’s leading automobile manufacturer, PAN has embarked on several measures to achieve this. With the appointment of Ibrahim Boyi as Managing Director/CEO in 2013, the company got a fresh start that is fast propelling it to greater heights. The management team led by Boyi is working round the clock to re-establish PAN’s position as the pioneer and leading auto manufacturer in Nigeria. In this interview, Boyi, PAN’s Managing Director/ Chief Executive Officer, spoke with George Moses, Time Nigeria’s Bureau Chief. Excerpts:
What impact does the national auto policy have on your operations?
Let me start by saying that the auto policy, when effectively implemented will ignite series of reactions that’ll be of immense benefit to Nigeria. The goal of the policy is to encourage local production, the development of skills and manpower locally; creation of employment opportunities, and so on. Like I have always said, a well implemented auto policy will naturally help improve the Nigerian people. Let me also state here that, as a result of such policy, more opportunities for our people will be created. In a nutshell, such policy will stimulate the emergence of better and cheaper products. With the right regulations in place, I can assure you that we will be able to add value, attract suppliers and create jobs and automobile clusters.
PAN has keyed into the Federal Government’s automotive policy. The company is in the process of outrunning its competitors just like it did in the 1970s and 1980s. Peugeot brands still retain all the excellent features for which it was renowned. Our products are warranteed for three years after purchase, we have re-opened maintenance centres and rebuilt our dealership networks which are fully equipped with genuine spares and training to enable them handle current Peugeot technology.
PAN has remained the best and most comprehensive assembly plant in the West African coast. I am glad to tell you that our plant is currently churning out vehicles, and this time around, production will be permanent. As a matter of fact, PAN Nigeria has migrated from SKD (Semi-Knocked down) to CKD (complete knocked down) production. This development is in line with the objectives of the National Automotive Industry Development Plan (NAIDP) which encourages local production of vehicles and components in the country. Certainly, the new automotive development plan will help to develop Nigeria’s automotive industry and place it in the league of auto-producing countries.
Some people seem to have reservations about the policy. But from your submission so far, it is apparent that you are convinced that the policy is a healthy development as it would stimulate growth for PAN in particular and the entire auto industry in Nigeria?
Yes. There is no doubt that the auto policy had provided strong encouragement for the production of Peugeot vehicles after many years of in-activity. The policy has also attracted the support of Original Equipment Manufacturers (OEMs) partners, AP France. With this partnership, a new window of opportunity has been created for employment and re-engagement of dis-engaged workers and also revive the businesses of the moribund local component manufacturers.
PAN is currently working closely with its French-based Technical Partner, AP France. We are introducing very competitive vehicles that are made for Nigerian roads, and can compete favourably with leading brands. We are putting everything in place to ensure that the company is properly positioned in Nigeria’s increasingly competitive auto-market. A thorough implementation of the automotive policy will enable it to achieve its aims and objectives.
I believe that legislation of the policy into an automotive law would go a long way to make it more effective and beneficial. Such development would promote local automobile production and reduce the importation of used cars, which has had adverse consequences on indigenous auto manufacturing.
Now that your effort to revive Peugeot Automobile Nigeria appears to be yielding fruits, what should Nigerians expect from the company?
As you can see, we have since commenced production. Our customers can be sure of better services; better customer satisfaction as we are offering them excellent products that can compete with any brand in the market. We are regaining and re-building our market. We are churning out affordable brand new cars that’ll meet the tastes of our customers for durability and comfort.
Let me also say that Peugeot Automobile Nigeria Limited has never stopped working. The company went through its low times like every other business. Now that PAN back, we will strengthen far reaching operations and do everything necessary to regain the company’s past glory. We would be producing vehicles that’ll meet the needs of our different customers. We will produce low range vehicles and also high range vehicles for executives and the governments. We are going to make available cheaper vehicles for low income earners. We have already started to address the cheaper car market segment with the production of cars for taxi services. We are going to be churning out more of the cheaper vehicles into the market.
AP Peugeot’s Executive Vice President for Africa and the Middle-East was in Nigeria not too long ago. Was his visit part of the ‘fruits’ that your effort is yielding?
Let me put it this way. President Buhari’s effort to attract foreign investors has obviously started yielding results. No foreign investor would be eager to do business in a country that does not have enabling and healthy environment for business. As you probably know, AP France has been our technical partners. Therefore, the visit of its Executive Vice President for Africa and the Middle-East to Nigeria is connected with our efforts to restore PAN to its past glory. Our effort would have amounted to nothing without a good auto policy place.
Yes. There is no doubt that the auto policy had provided strong encouragement for the production of Peugeot vehicles after many years of in-activity. Our effort has also attracted the support of Original Equipment Manufacturers (OEMs) partners, AP France. We now have a very cordial working relationship with our technical partners that would make great impact on our overall operations.
What brands of vehicles does Peugeot Automobile Nigeria Limited produce presently?
Well, presently, we produce Peugeot 508 and 301 cars. Certainly, we shall release additional products into the market. You can be sure of that.
What are your expectations for the Peugeot vehicles that your company is producing?
We expect massive patronage and usage of the Peugeot brands by individuals, corporate organizations and governments. The high quality of our products will certainly attract such level of patronage.