By: Habeeb Abdul
One trademark of the author’s pre-teen years was the ability to recognise vehicle brands at first sight. Toyota, Mazda, Nissan, Ford, models of all shapes and sizes were solidly engraved in visual memory. However, of all the acquired names, none stood out as Nigerian. It is 2021 and a Nigerian automotive brand you probably know by now is Innoson, a company running out of Nnewi, Anambra State.
It tags itself the ‘Pride of African Roads’, and it is the only notable indigenous carmaker, which has manufactured thousands of vehicles till date. In this article, insights from Innoson’s operations will be used to outline a trajectory for new indigenous manufacturers.
Innoson Vehicle Manufacturing is none other than the brainchild of Innocent Chukwuma, a prominent businessman from Nnewi, Anambra State. Before IVM, he had started Nigeria’s first motorcycle assembly plant in the 1980s. His input seeded a disruption in motorcycle importation at the time. And along the same pattern, the establishment of IVM was a response to the overwhelming reliance on foreign vehicles.
Japanese, US, and Korean brands such as Toyota, Kia, and Ford, command a large part of the market share. Where these vehicles are not brand new, they are purchased second-hand, spurring the company’s visibility on the roads. However, a contention against these vehicles is the pricey labels they often bear. These prices, which are unattainable for most Nigerians, result in low purchases of vehicles across the country. Pressured by the daily costs of transportation, inconvenience, and a host of other factors, Nigerians would desire a cheaper alternative. And this paved the path for Innoson.
IVM’s Reception In The Nigerian Market
Although the company is bent on a dream to displace foreign contenders, it is not an exact favourite of its Nigerian clients. Frequently, the design of Innoson vehicles is compared to older competitors. Its product line is also viewed with doubt as to quality. Unlike Toyota or German-made vehicles, there is scepticism on the actual road potential of the local models. This reluctance in patronage can be linked to the preference of Nigerians for foreign cars over local ones. Thus, Innoson competes to sell where long time players have won people’s hearts.
If The Government Doesn’t Buy…
A central part of the Innoson market strategy has been to rely on government support. Like the ban on food importation, government policies like the 2013 Nigerian Automotive Industry Development Plan (NAIDP) exist to boost indigenous growth. This and the Buhari administration’s inaugural stance of ‘buying Nigeria to grow Nigeria’ create a refreshing landscape for local car manufacturing. Getting its foot in the door, Innoson has positioned itself as the ideal market for government-owned vehicles. It clientele features customers like the Nigerian Army, Police, Federal Road Safety Corps, state-level agencies and other administrative units. To cater for the needs of armed entities, Innoson manufactures fighting vehicles and pickups for police and army operations. It also designs trucks for the Fire Service.
Government patronage therefore accounts for a central part of the Innoson branding strategy as the more visibility its vehicles have in official fleets, the higher the chance of diffusion to the wider market. It is also worthy of note that Innoson plays a political game. During the 2015 elections, the company’s CEO, Innocent Chukwuma, backed the Goodluck Jonathan campaign train. Upon defeat, the company threaded its way into the new layout by showcasing the self-sufficiency idea the government planned to implement. In its home state, Innoson enjoys an ‘apple-of-its-mother’s-eye’ status from the Anambra government. IVM wares are ordered by legislative and executives branches alike.
Let’s Play With Big Brother
There is no gainsaying that brands must follow trends to boost publicity. In the last half-decade, the trend has been the Big Brother Naija editions. Touted as the biggest reality show in Africa, BBN enjoys prominence on virtual and offline media channels. Its loyalty pool in Nigeria includes people of different ages and social statuses. Keying into this network, Innoson staked a sponsorship claim in BBNaija. The Pepper Dem edition in 2019 saw housemate, Mercy Eke, win herself a brand new IVM G40 SUV. In the following edition, housemates Ozo and Laycon won an IVM Caris and a G40 respectively. The latest versions of each model were equally awarded to Pere, a task winner and Whitemoney, who emerged first at this year’s event.
The awarded products were not randomly selected. For context, the IVM Caris postures as the Nigerian-made alternative to popular Toyota Camry/Corolla models. With a slightly similar build and competitive pricing, the underlying offer is remarkable here. The IVM G40, on the other hand, is one of the company’s top-of-the-line SUVS. It is an automatic option for individuals with eyes for the exotic and money to buy with.
Expanding With Innovation
In addition to these, Innoson Vehicle Manufacturing commits to other markets. In 2020, the company launched its ride hailing service in Enugu State. Poised to increase its road presence and threaten competitors, it started with a rollout of 500 vehicles, a figure it says will expand over time. Its mobile app, IVM Cruise, can be used to order rides.
Although the company has seen a marginal level of success till date, it is not exempted from typical Nigerian challenges. First among these is epileptic power supply. The lack of energy for manufacturing necessitates a reliance on alternative sources. The same story goes for prospective local manufacturers who fear electricity costs will impact operations.
Another issue in the industry is the lack of policy stability. Much as the government may be aiding the growth of IVM, its recent decision to slash car import duties can hurt the sector. The NAIDP propelled a hike in vehicle import levies to protect local manufacturers. These sometimes went as high as 70%. However, with the enactment of the Finance Act 2020, car import duties have been slashed from 30% to 5%. This is asides the reduction in import duties on trucks, tractors and other vehicle types.
As with other segments of the Nigerian manufacturing sector, Innoson contends to procure raw materials. Although it argues that it only imports lights and vehicle engines, the impression it creates of local capacity cannot be dismissed.
Innoson Vehicle Manufacturing is certainly a guiding lamp to any future players. From remarks on the design similarities of its products to foreign vehicles, newbies can learn to be more creative. They would also have to consider challenges like an import-desiring local market, power sector challenges, and building brand recognition from scratch.
Without doubt, Innoson is making its mark in vehicle manufacturing. Its footprints have extended to Sierra Leone, Mali, and a few other countries. But, how well it performs depend on its survival instincts in a competitive market.