Explaining why Innoson Vehicle Manufacturing Company produced CNG buses ahead of Nigeria’s subsidy removal is a story that can only be told by a patriotic domestic investor who wants to take his country along a sustainable development lane.
There are very few hitech institutions that are involved in the automotive industry in Nigeria but the arrival of Innoson Vehicle Manufacturing company on the stage optimized the conscience of industrialists who have treated the industry with so little zeal. Today, the enthusiasm in automobile manufacturing is growing as the only full vehicle manufacturing plant in the country is getting all accolades amidst some not so good attitudes by customers, some of which do not bother him so much. With several difficulties from the environment the plant has continued to grow in leaps and bounds with the owner even looking deeper into the future on how the investment could be a mega investment where every Nigerian may want to be part of the ownership,Chukwuma Akaigwe writes..
The ‘secret’ behind the speed at which Innoson Vehicle Manufacturing Company {IVM}, Nnewi beat other brands to line up hundreds of locally manufactured compressed natural gas {CNG} buses for delivery to customers following the removal of fuel subsidy on May 29, has been revealed by the Chairman of Innoson Group. Chief Innocent Chukwuma said in an interview at his auto plant in Nnewi on Tuesday, that long before the electioneering campaign (during which most of the Presidential candidates vowed to end subsidy) and even before the declaration by the President that subsidy had gone, he had known that high pump price of petrol and diesel would shift demand to vehicles running on natural gas.
Chwkwuma disclosed that he benefitted from his own foresight, “My vehicle manufacturing factory is about 12 to 13 years today. I diversified into producing CNG vehicles two years ago when I knew that someday soon, fuel price would go up. I knew right from the beginning that government must remove subsidy which would eventually increase the pump price of fuel.
“I started planning by buying the equipment. That was why I was able to produce so many units immediately the fuel subsidy was removed by the government. If you go to places like Benin republic, 80 per cent of the vehicles they are using are CNG- powered. They have tested CNG and it’s working very fine for them over there. So, I believe in the nearest future, all Nigerians will embrace CNG vehicles, because they are not just very affordable, but using them also leads to low maintenance costs. “That was why I started the production in time, in fact, before everybody, and we are doing well. Now, we are converting petrol/diesel vehicles for people that are using our own (Innoson) vehicles. After some time, when our own vehicles have been covered, we can then start converting vehicles for other people,” he said.
He said he was sure the withdrawal of subsidy was going to raise the pump price of petrol so high that everybody would switch to CNG, which according to him, is cheaper and environmentally friendly. “That was my own thinking before I started to develop CNG. I knew it was the way forward, and that government must eventually remove the subsidy on fuel. Today, they have done it. It was a big surprise to many that I started manufacturing the alternative CNG buses and cars even before the subsidy was removed. But, there is nothing there. It was just that I had the foresight to calculate what the fuel price would be in future; believing that when the pump price goes too high up, the alternative would be CNG vehicles.
So, I went straight and started producing CNG vehicles. Now, I make vehicles that can use CNG and petrol or diesel. In some places, CNG is not available. In such situations, the alternative can be serving them. When CNG is available everywhere, I will make all the engines to be CNG-powered only. Now we are doing engines that can be CNG, fuel or diesel-powered. The price is also very cheap,” Chukwuma noted.
The difference between CNG and the other sources of fuel is very clear and far apart. So, today, following subsidy withdrawal, people no longer fuel their vehicles as they used to because of the harsh economic condition in the country. That is why I believe that if government gives some kind of incentive to companies like Innoson, we can build CNG conversion centres everywhere in Nigeria, so that everybody can embrace CNG and enjoy the huge benefits. Many Nigerians are using my vehicles. We have a lot of our CNG vehicles in Edo state and other places, and they are happy with their performance. I am encouraged. People are giving us a lot of support. Many people are no longer ready to buy imported vehicles anymore, except Innoson vehicles. They believe that if they continue to buy Innoson vehicles, the company will employ more Nigerians and people will be more secured in their jobs. Even though ours are not perfect, they prefer using it with the anticipation that after sometime, what is good will even be better. I believe our own is still good enough. ..”, he emphasized.
He said he was conscious of the need to use his manufacturing companies to keep the youths busy, and away from crime: “Sometimes when we want to procure certain equipment, we need, we usually buy the manual (instead of the automated version) so as to employ more Nigerians to man them. It is not as if the automatic machines cannot work here, but we are conscious of the need to create jobs. I buy manual so that more people can get involved in the production. There was a belt we were supposed to buy: We needed the automatic version, but we bought the manually operated one and that is the difference between my factory and others’.
Instead of using some automatic equipment, we use people to do the job. I am interested that our people are employed and kept busy. Keeping the young ones busy helps the society and it is very important. If the youths are not busy, there will be problems. So we are creating jobs to keep them busy. That is the way forward”.
Dr. Chukwuma reacted to the specific mention of 20-seater CNG buses in the broadcast by the President saying, “any size of bus that Nigeria wants, we have the capacity to produce them here in Nnewi. We have the capacity to produce 120-seater, 20-seater or 10-seater bus models. The important thing is to give them what they want. We produce bus variants from 7-seater to 60-seater, (the latter with provisions for standing passengers). So, it all depends on what you want. We also produce cars, SUVs, and MPVs powered by CNG.” Dr. Chukwuma also spoke on the high cost of converting vehicles from consuming petrol or diesel to CNG: “Conversion is very high now and before the cost will come down government has to come. Before the cost will come down, there is need for an investment which requires government support. With such investment, the cost of conversion to CNG can be reduced to N300, 000.
“But, today because such investments are not yet on ground, the cost of conversion is too high. If the government can put certain support facilities in place, the conversion will be reduced to about N300,000. At Innoson, we have something to do to reduce it to that price, but it requires government’s support. Again, there are certain things we are supposed to produce here because we have the materials. If we produce them here, the conversion cost will be N300,000. Without producing these vital materials here, the conversion cost will be like N800,000. That investment is important.
On what his company is doing to make rechargeable facilities available to users of CNG cars, Chukwuma noted that, “the solution to electric vehicles is the local production of the batteries here in Nigeria. Without producing the batteries locally, electric vehicles will remain expensive. First of all, we need investments in battery production. When we manufacture it here, the cost of electric vehicles will come down. Importing the batteries will make the vehicles expensive and nobody will like to put 50 percent of the vehicle cost to buy the battery alone. Instead, they will prefer to buy petrol or diesel-powered vehicles. Don’t forget that after four years, electric vehicles users will have to change the battery and buy a new one. Electric vehicles are good, but not yet for Africa, I don’t think it will go far for now. This is because when you buy an electric vehicle, a major component in the vehicle, like the battery, will no longer be usable after four years. The battery will die after four years, and most of them are like that.
The solution is, therefore, local production of batteries. Producing the batteries in Nigeria will considerably reduce the price, so that even when it is to replaced every four years, it won’t impose a huge financial burden on the owner.The best type of vehicles that suits the Nigerian situation today is the CNG.
It will be better and cheaper when we produce the CNG (gas) bottles here. But if you import the bottles to use in manufacturing CNG vehicles, the price of the vehicle will be very high. When the gas bottles are imported, conversion from petrol/diesel to CNG will not be less than N800,000. But producing the bottles here in Nigeria will crash the conversion cost to N300,000.
To set up such investment is very expensive. So I strongly feel that government must make some initial investments to encourage the energy transition. Government needs to look into this challenge with a view to providing incentives, so that people will be able to convert their vehicles at cheaper costs.”
His projection for the popular IVM brand of his product is one feeling so interesting,“my projection is to see made- in-Nigeria Innoson brand of vehicles everywhere you go in Africa. It is a projection for Nigerians and not for Innoson alone, because if you travel to anywhere in the world and see Innoson vehicle, you will know that it is made in Nigeria. Innoson is our own and all Nigerians supposed to support the brand by buying Innoson vehicles. On the level of patronage, he was happy with the level of patronage of the CNG buses since the era of fuel subsidy ended, because, according to him, the need for the vehicles is rising, stating that orders have been coming from both private individuals and government.
For Innoson Motors, There has never been a better last year. It was in Year 2009 that Innoson Vehicle Manufacturing Plant rolled out its first set of vehicles and since then over 100,000 units of vehicles has been manufactured locally from its plant that has the capacity to produce 10,000 units of cars annually. Being the first automobile manufacturing plant in Nigeria, it has never been easy for the founder and CEO of Innoson Vehicle Manufacturing Co Ltd, Dr Innocent Chukwuma.
The whole project started small and has been getting bigger and bigger on daily basis because of the power of innovation. The application of new technology, added to the patriotism of a disciplined entrepreneur, the vehicle project has started to grow even better than old wine in a wineskin. The industry has become Nigeria’s signature industrial achievement that explains the dexterity of her average industrialist. Given the much desired encouragements akin to what happens in other developing economies, the project will obviously be seen to have achieved a quantum and more allied institutions would have been incubated to offer more leverage to a country of over 200 million energetic young people.
In a country that is import driven, where basically over 80% of household items is being imported most especially toothpick, it can only take sheer guts for one to venture into the establishment of a manufacturing plant to produce locally made vehicles. For 7yrs that IVM has been on business, it has never been easy but more importantly, there has never been a better last year. IVM has been moving from glory to glory. In its quest to be among the top automotive brands in terms of reliability, quality, and long-term durability, it has been moving slowly, gradually, and steadily closing the gap little by little, improvement by improvement on its vehicles and services.
The company believes that “there has been challenges by some of our vehicles by the users, some which occurred either by poor or bad handler-ship by our customers and vehicle users and some by the manufacturers defects but in all these cases it has been resolved and handled professionally by the management.
The truth is that there is no vehicle manufacturing company in this world that did not face the initial challenges of manufacturers defects and even still do today but the high point has always been; identifying this issues and resolving it.IVM has not been different too. Any careful observer that has been monitoring IVM vehicles from the very inception will observe there has been tremendous improvement on IVM vehicles. This is because IVM is using the concept of regionalisation in the production of its vehicles by making sure that it considers local tastes and consumer preferences in the African region during production.We ensure we get feedback from the users of IVM in order to know their views on their IVM experience and by these feedbacks we seek better ways to improve on the tastes and preferences of our customers to suit the environment. For example, based on various feedbacks we got from our customers and users of our big vehicles we have improved on the clutch system and brake system, improved on the engine capacity, improved on the body structure of the bus. IVM also improved on the interior décor and comfort by employing luxury seats, robust air-conditioning system and on board entertainment system. IVM also improved on the suspension system of its vehicle, transmission system and enhanced shock absorber
On the smaller vehicles, the company has noted that IVM improved on the fuel economy, improved on the interior décor of the vehicles, improved also on their engine output. It further indicated that IVM vehicles can be compared to any best auto you can see in the market today. Its vehicles use SRS airbag, suspension systems that are internationally acceptable. On safety, it employ ABS in the production of its vehicles, together with EBD that ensures even distribution of brakes between the front and rear wheels. All these are modern gadgets that are added to IVM vehicles which also can be found in any modern vehicle. On the engine output, IVM uses one of the best engines in its buses which are Cummins engine that is produced in Europe, and its smaller vehicles also makes use of Europe manufactured engines. These are all internationally accepted engines.
Innoson Motors employ international best practices in the production of these vehicles and they can compare very favourably in terms of durability, fuel economy, safety. Nigerians should therefore keep faith with Innoson Motors and embrace it as our pride.
IVM is not there yet but with the support of all; the government, corporate organizations, relevant institutions and individuals, IVM can rise to become one of the greatest thing to come out of Nigeria because being the first indigenous vehicle manufacturing company in Africa, it can be what GM and Ford is to America, what Toyota and Honda is to Japan and what Kia and Hyundai is to South Korea. IVM greatest achievement is not behind them neither is it with them now. IVM best is yet to happen. As consumer expectations continues to change and new technologies keep coming out, so will IVM continue to improve on its vehicles, let’s all therefore keep faith with Innoson motors.
