Nigeria: Abanobi - How FG Can Boost Production of Automotive Parts

23 September 2024

In this definitive interview, Business Manager and Head, Vitaparts Nigeria Limited, a subsidiary of Vitafoam Nigeria Plc, Mr Udoka Abanobispeaks on the challenges facing manufacturers of automotive parts in Nigeria and how the federal government can initiate appropriate policy to enhance production of automotive parts for accelerated growth and development of the Nigerian economy, excerpts

The National Automotive Design and Development Council (NADDC) and the African Association of Automotive Manufacturers (AAAM) have recently toured auto parts manufacturing companies in Nigeria, including your organization. What insights or opportunities did these visits reveal for the Nigerian automotive sector?

It was amazing that the government is working to support local auto manufacturers. I must say I was elated to have welcomed the team to Vitaparts Ltd. The visits highlighted the immense potential for growth within Nigeria's automotive sector, emphasizing the need for local content development for collaboration between local manufacturers and international partners. Opportunities identified include increasing local production to reduce dependency on imports and fostering innovation through research and development. Local manufacturing will also help lower the demand on forex.

What are the primary challenges currently facing manufacturers of automotive parts in Nigeria, and how is your company addressing these issues?

The primary challenges include high operating costs, inadequate infrastructure, and competition from sub-standard imports. Vitaparts addresses these by investing in technology to improve efficiency

and implementing strict quality control measures in our processes.

With differential tariffs and an influx of sub-standard products impacting genuine manufacturers, how does Vitaparts contend with these challenges to maintain product quality and market position?

Yes, the influx of substandard products impacts seriously on our sellout to the market. Being a subsidiary of Vitafoam Nigeria Plc, we pride ourselves in the quality of our products. Vitaparts maintains product quality by sourcing high-grade raw materials and employing rigorous testing procedures. Our company also works closely with regulatory bodies to ensure compliance with industry standards and educates consumers about the dangers of using sub-standard products. We undertake periodic enlightenments aimed at mechanics on the importance of using genuine and quality filters. As an organization. We are not just about profits but also about making positive impact in our environment through our enlightenment initiatives.

Vitaparts, as a subsidiary of Vitafoam Nigeria Plc, operates below installed capacities. What strategies are you employing to navigate and thrive in the challenging operating environment?

At the moment, Vitaparts operates below the installed capacity because of several factors. Prominent amongst them is impacts of the differential tariffs and low quality products that have flooded the market .We are currently focusing on optimizing existing processes to improve efficiency. We are also exploring new markets and diversifying product offerings to increase demand and utilize full capacity.

What specific measures should the government implement to foster a more supportive environment for automotive parts manufacturers in Nigeria?

The federal government should implement favorable policies, such as tax incentives and subsidies for local manufacturers, improve infrastructure, and establish stronger regulations to curb the importation of sub-standard parts. Currently, imported raw materials are subject to higher taxes than fully assembled products imported from abroad, which does not incentivize local production. To enhance the quality of our products, it is essential that the automotive manufacturing industry be granted tax waivers.

A committee is working on a blueprint for the Nigerian Automotive Industry Development from 2023-2033. What key areas should this blueprint prioritize to boost the sector's growth?

For us at Vitaparts, key areas include enhancing local production capabilities, fostering R&D, improving supply chain logistics, and developing skilled labor. Additionally, the blueprint should emphasize the importance of creating a favorable business environment through policy support. The blueprint should also help in creating a database for collaboration amongst local manufacturing companies and the auto industry

Could you highlight the main products offered by Vitaparts, and explain the unique benefits they provide to the automotive industry?

Vitaparts offers high-quality oil filters designed to extend engine life and improve vehicle performance. Our products meet stringent international standards, ensuring durability and reliability. It is imperative to note that our filters can function effectively for more than 20,000KM which clearly separates us from most of the filters in the market.

In the face of rising inflation, high production costs, and decreased consumer purchasing power, how is Vitaparts maintaining profitability and operational efficiency?

As a business operating in a highly competitive market, Vitaparts is currently implementing cost-saving measures, optimizing supply chains, and prioritizing high-margin products. We are also exploring alternative energy sources to lower production costs and alleviate the effects of inflation. Additionally, automating our processes has significantly enhanced our operational efficiency and resulted in substantial cost savings.

Are there any upcoming product innovations or plans for market expansion that you can share and how do these initiatives align with your growth strategy?

Vitaparts plans to introduce new eco-friendly filters that align with global sustainability trends. Our market expansion strategy includes entering new regional markets in West Africa and forming strategic alliances with international partners. Our goal is to become the leading oil filter brand insub-Sharan Africa.

What sets Vitaparts apart from other automotive parts manufacturers in Nigeria?

What sets Vitaparts apart is our commitment to quality, innovation, and customer satisfaction. We leverage advanced technology and continuous improvement processes to deliver superior products.

What steps is Vitaparts taking to educate consumers about the benefits of using high-quality automotive parts and how do you enhance consumer awareness and trust in your

products?

Vitaparts conducts workshops, seminars, and online campaigns to educate consumers on the importance of using genuine parts. We also collaborate with industry associations to promote standards and build consumer trust.

Your long-term vision for Vitaparts, strategic goals you over the next five years and how do you plan to achieve these objectives?

Over the next five years, the focus is on expanding market share, enhancing product innovation, and becoming the leading provider of automotive parts in West Africa. The company plans to achieve this through strategic investments in R&D, partnerships, and continuous improvement.

Is your organization open to partnerships and collaborations with wholesalers and distributors to drive business growth and sector development?

Yes, we are keen on forming partnerships with wholesalers, distributors, and other industry players. These collaborations are crucial for expanding market reach and driving sector growth.

How can potential partners and distributors engage with Vitaparts and what are you looking for in these collaborative relationships?

Potential partners can engage with Vitaparts through direct contact, industry events, and networking platforms. The company is looking for partners who share their commitment to quality and customer satisfaction.

Is there any additional information or upcoming developments related to Vitaparts that you would like to share with our audience?

Vitaparts is constantly innovating and exploring new opportunities. There are plans to launch new products and expand into new markets, all aimed at strengthening their leadership position in the industry.

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