Nigeria: Peugeot plans to resume operations

LAGOS, Nigeria

Peugeot Automobile plans to resume vehicle assembly in the country, a top Peugeot official told President Muhammadu Buhari on Thursday.

"In an audience with President Buhari today, Peugeot vice president for Africa and the Middle East Jean-Christophe Quemard said the automobile company is ready to resume vehicle assembly in Nigeria," Nigeria's presidential spokesman Garba Shehu said in a statement.

Quemard told Buhari that the company has a three-phase plan for the assembly of at least 4,000 cars in Nigeria next year. That number could increase to 10,000 by 2021, according to the statement.

"The plan, which he urged the Nigerian Government to support with appropriate policies and actions, will entail higher local content in the assembly of Peugeot cars in Nigeria and the exportation of locally assembled Peugeot cars from Nigeria to neighboring African countries," according to the statement.

But Peugeot will seek a local partner for the vehicle assembly operations, according to the statement.

Peugeot Automobile Nigeria (PAN) , which commenced operation in 1975 as a partnership between the government and Peugeot, closed shop in early 2000 as the market for cars shrank in the 1990s.

PAN commenced production on March 2, 1975 with an annual output of 60,000 cars, improving substantially to 90,000 cars per annum in the 1980s. It had more than 2000 staff on its payroll. PAN’s role in the industrial sector at inception was significant as it greatly relied on local suppliers who provided about 37 percent of local content for production.

In November 2006, however, PAN was privatised in line with Government’s agenda to build a stronger, more competitive and diversified economy; Nigerian automaker ASD Motors emerged as the successful core investor and took over management of the company in January 2007.

But the company made losses, and, following the accumulation of non-performing loans and bank debt, in October 2012, the government agency Asset Management Company of Nigeria (AMCON) acquired the debts of the company and converted a portion to equity to help restructure the firm.

At the moment, PAN has technically reverted to government ownership with up to 85 per cent of its shares now held by the Nigerian government and AMCON.