French Carmakers Eyeing Nigerian Market Re-entry Through Local Partnerships

French car manufacturers are actively pursuing a reentry into the Nigerian automotive sector by forming alliances with prominent Nigerian enterprises for local vehicle production, as disclosed by Marc Fonbaustier, the French ambassador to Nigeria.

Ambassador Fonbaustier shared details of two significant partnerships with ambitious production objectives in an interview with PREMIUM TIMES.

The first collaboration involves Dangote Peugeot Automobile Nigeria Limited (DPAN), a joint venture between Dangote Industries Limited and Stellantis Group, the entity that owns Peugeot. This partnership operates an assembly plant in Kaduna, where vehicles are assembled from imported components.

Fonbaustier indicated that DPAN, which initially focused on the Peugeot 301, is now expanding its scope to include the production of several other models, such as the 308, 3008, 5008, and 508.

The venture aims to achieve an annual production and sales target of 44,000 vehicles within Nigeria, a goal the ambassador deems both ambitious and attainable.

Historically, French automakers like Peugeot and Renault held a significant share in the Nigerian market, especially from the 1970s through the 1990s. Peugeot operated a factory in Kaduna, known as Peugeot Automobile Nigeria (PAN), which manufactured popular models like the 404, 504, and 505. This plant was a major employer, supporting thousands of jobs and numerous local suppliers. Renault also had a presence, albeit on a smaller scale.

Nigeria had aspirations to develop its domestic automotive industry, with Peugeot playing a key role in these plans. However, the country's economic challenges, including the recession in the mid-1980s and a decline in oil prices, led to increased production costs. Coupled with the influx of used imported cars, often referred to as "Tokunbo," these factors adversely affected local production and sales.

Currently, Nigeria is witnessing a resurgence in local vehicle manufacturing, with brands such as Innoson, GAC, and Mikano contributing to this growth.

Ambassador Fonbaustier affirmed that the French automotive sector is making a deliberate, though gradual, effort to re-establish its presence in Nigeria.

"We have new ambitions, but you know, for the automobile industry, it's a long cycle. It took a long time for the French to vanish from the automobile scene. It will take a bit of time to see the resurrection and the arrival," he stated.

He also mentioned a second partnership involving Renault, a major French automaker, and Coscaris Group, a substantial automotive distributor in Nigeria.

According to Fonbaustier, these two companies are collaborating on the "co- production of some vehicles," specifically mentioning the Logan brand.

"But this is not the end of the story. I think French business in Nigeria is broader than that. As you know, we still have about 100 companies operating in Nigeria. They directly employ 16,000 Nigerians. I think the amount of French investments before the shrinkage of the Naira was estimated to be 10 billion," he added.