Johannesburg - The decision by the Ford Motor Company to establish a semi-knocked-down (SKD) assembly operation in Nigeria is the first step in a wider plan by the motor manufacturer to grow its manufacturing presence in that country.
Ford has entered into a partnership with the Ford dealer group, Coscharis Motors, on a project to assemble the Ranger on a SKD basis using vehicle kits supplied from South Africa.
Jeff Nemeth, the president and chief executive of the Ford Motor Company for the sub-Saharan Africa region, declined this week to go into detail on the investment that would be made in the assembly plant but the company was hoping to grow the business.
He said the investment “was going to come over time” because the Nigerian automotive policy stated that you started with simple SKD, migrated to more complex SKD and then to completely knocked down manufacturing.
“We would rather not disclose an investment at any particular point in time because it’s evolving,” he said.
Nemeth said the Nigerian facility was not a threat or risk to Ford’s manufacturing operations in South Africa because its plant in Silverton was operating at full capacity.
On track
The Nigerian facility would have the capacity to assemble 5 000 units a year.
But Cosmas Maduka, the president of Coscharis Motors, said the facility would be able to assemble 5 000 units a year on one shift and it could introduce a second shift.
Nemeth said Ford last year sold about 4 000 vehicles in Nigeria and was on track to sell a similar number this year.
The Ranger accounted for about 50 percent to 60 percent of Ford’s mix in Nigeria, which meant it would double its Ranger business if it shipped all 5 000 Ranger kits from South Africa to Nigeria.
Nemeth stressed that they were only announcing the assembly of Ranger models at this point in Nigeria and this was the only product that Ford had approved for assembly in the country.
This followed Maduka indicating that they would initially be assembling the Ranger and then expanding the operation to also assemble Ford special utility vehicles.
Maduka said the partnership with Ford was an exciting moment and dream come true for him and his organisation.
Lack of experience
He admitted Coscharis Motors did not have any motor manufacturing experience, apart from assembling Indian motorcycle kits.
But he stressed that Nigeria with a population of almost 180 million people was an important market in Africa that could not easily be ignored.
Maduka said the Nigerian new vehicle market was very small at about 120 000 units a year, but the country had a 560 000 used vehicle market.
Nemeth said Ford would train all the people in the assembly plant “the Ford way” and install the Ford production system to run the plant.
“If we do all that, manufacturing experience isn’t a key factor in the decision process.”
Nemeth said Nigeria had the potential to be a 500 000 unit a year sales industry and together with the Economic Community of West African States (Ecowas), such as Ghana, Ivory Coast and Cameroon, was “a tremendous opportunity to consider in the future”.
He stressed that they had signed a partnership agreement with Maduka and Coscharis Motors only for a SKD assembly operation.
“We are not sure what the future brings and we put together a business case that allows him (Maduka) to feel comfortable with his investment, even if we don’t continue together,” he said.
Nemeth added that Ford had not made any commitment that it would continue to partner with Maduka on any future CKD manufacturing operation.
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