When the news that the Dangote group of companies was going to venture into the automobile industry in collaboration with Kaduna State government, it was received with great hope and expectations for it to become a reality. The reason for this was basically for the fact that it will, among others, create job opportunities for Kaduna State youths particularly since the assembly plant is situated in state.
What looked like a dream some years ago became a reality when Dangote Group was granted a franchise by the Peugeot of France Groupe to construct and operate an assembly plant in Nigeria.
The new assembly plant by Dangote-Peugeot Automobile Nigeria Limited (DPAN) is a joint venture between Dangote Industries Limited, the Kaduna state government, and Peugeot of France PSA Groupe. This became a possibility when Dangote group made an initial N11 billion bid for majority stake in Peugeot Automobile Nigeria (PAN) from the Asset Management Company of Nigeria (AMCON).
The new Peugeot Assembly plant is presently located in Dutse, along the Kaduna-Abuja expressway, Kaduna, about 25 kilometres away from the present location of PAN Limited assembly plant in Kakuri industrial layout of Kaduna. With this, it means other automobile competitors such as Innoson, Toyota, Kia, and Leyland Assembly plants may have to up their games because Dangote Group of Companies is known for selling goods at the slimmest margins of profit apparently for quick turnover and revenue from after-sales services. Again, with the collaboration with the Kaduna state government, it therefore means that patronage from the state government is also guaranteed since they are shareholders.
Recall that Peugeot’s executive vice president for Africa and the Middle-East, Jean-Christophe Quemard, met President Muhammadu Buhari recently to discuss reviving local production in the country. Recall also that in 2016, AMCON invited prospective investors to bid for its 79.3 per cent stake in Peugeot Automobile Nigeria. AMCON acquired a majority stake in PAN in 2012 after taking over the company’s debts worth about N30 billion owed to some Nigerian banks.
Peugeot Automobile Nigeria Limited (PAN) was incorporated on December 15, 1972, as a limited liability company with an authorized share capital of N3 million and commenced full operations on March 2, 1975.
After about two decades of smooth operations, the company ran into unpleasant situations occasioned by series of policy somersaults by the government and inadequate tariff protection for local assembly plants.
By 2013, the company’ s revenue generation profile had dropped to a meagre N2 billion per annum from about N30 billion a decade ago. Its market share also dropped drastically from 20 per cent to only two per cent, with car sale figures declining from N31.7 billion in 2007 to N1.96 billion.
With a huge debt of N30 billion by 2011 and no prospect of a private investor willing to risk his money in turning it around, in 2012, the AMCON acquired a controlling 80 per cent shareholding and assumed board and management control.
In February this year DPAN commenced the assembling of Peugeot brand of vehicles at its newly built Green Field Assembly Plant in Kaduna. At the roll-out of the first 301 car, both the management, staff and people of Kaduna State celebrated the coming on stream of the vehicle at the plant before it was officially commissioned by President Muhammadu Buhari during his state working visit to Kaduna. DPAN is scheduled to expand its model line-up to meet the varied demands and needs of the Nigerian auto market and vehicles expected to be introduced into the local market between now and 2023 include the Landtrek, 3008, 5008 and the new 508, which are expected to flaunt their outstanding aesthetics, rich technological endowment and safety features to appeal to the customers and the motoring public.
A document obtained from the DPAN, which has as its managing director, Ibrahim Issa Gachi, a seasoned engineer with over 30 years experience in automobile manufacturing, engineering and management consultancy services, indicates that the company has the capacity to assemble 120 cars a day running two shifts. The company noted that it is not unmindful of the reality that it is re-launching the roaring lion brand amidst socio-economic challenges, steep competition, cheaper and sometimes sub-standard Asian models.
The management, however, assured that it is confident that the popularity and the reputation of being reliable which the older generations of the vehicles earned across Nigeria over the past decades with 404, 504, 505, 406, 306 and others, will drive the new generation of vehicles now being assembled at the DPAN plant in Kaduna, to the top of market.
“With the New Green Field Ultima Assembly Plant, a lot is being done by DPAN to ensure visibility of the Peugeot brand and availability of spare parts to the network and the generality of Nigerians. DPAN will be encouraged by our technical partner to reposition the brand in the short, medium,and long term as we ensure customer satisfaction and sustainability.
“This dream has started with the re-launch of the Peugeot brand in Nigeria as well as the local assembly of the 301 at our new Kaduna plant and thereafter the introduction of the Landtrek, 3008, 5008 andthe new 508. Nothing is being spared to enable market recapture, hence all hands are on deck to ensure not just survival but also continued growth in a market with potential for cars in excess of 100,000 units per year and growing.”
It was also learnt that following the Peugeot franchise granted to DPAN, contact has been established with some existing Peugeot dealers and major customers to deepen the market as well as provide excellent customer service and satisfaction both in the short, medium and long term which is expected to impact positively on sales volumes, product visibility and overall profitability for all stakeholders.
But how do Kaduna people view this development?
Forr Engr. Herbert Nda Egbeja, “ the establishment of Dangote Peugeot automobile assembling plant in Kaduna is a welcomed development. We hope, however that it won’t be too expensive for the average people to afford. Vehicles today are above the reach of civil servants unlike what it used to be in time past, it is our prayers that this will be better” he said.
On her part, Hajiya Sadiya Yahaya said, “ I am happy because at least, it will create both direct and indirect jobs for people and that will help reduce social vices among the young ones if gainfully engaged”.
Dangote Group is a diversified conglomerate, with interests across a range of sectors in Africa. Current interests include cement, sugar, flour, salt, pasta, beverages and real estate, oil and natural gas, telecommunications, fertilizer, and steel.
It is hoped that the gains associated with the establishment of the assembly plant in Kaduna State and by extension in Nigeria will be a permanent one.
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