Between 1959 and 1980 the Federal Government built — by decree, by joint-venture and by oil-money — a national car-assembly industry from nothing. The opening move was the 1958 Customs Duties (Dumped and Subsidized Goods) Act, which let Lagos slap protective duties on imported cars. The decisive move was Decree No. 6 of 1972 (the Nigerian Enterprises Promotion Decree, see Banks · Act IV), which reserved automobile assembly for joint ventures with the Federal Government holding 40% and the foreign technical partner holding 60%.
Six plants resulted, each tied to a region for federal-character reasons:
- Peugeot Automobile Nigeria (PAN) — Kaduna, commissioned 1975, line opened 1976. French partner Peugeot S.A. Designed capacity: 60,000 units/year of the 504 and later 505. PAN became the staff car of the federal civil service.
- Volkswagen of Nigeria (VWoN) — Lagos (Ojo), 1975. Beetle and Golf. Designed capacity: 36,000 units.
- ANAMMCO (Anambra Motor Manufacturing Company) — Emene, Enugu, 1980. Mercedes-Benz trucks and buses. The only plant with significant local welding and body-pressing capacity.
- Steyr Nigeria Ltd — Bauchi, 1979. Steyr–Daimler–Puch tractors and 4×4 trucks for the military.
- Leyland Nigeria — Ibadan, 1976. Leyland buses and lorries.
- National Truck Manufacturers (NTM) — Kano, 1980. Fiat IVECO heavy trucks.
At the 1981 peak, the six plants together produced roughly 108,000 vehicles — about 90% of the new cars sold in Nigeria that year, and the largest auto-assembly footprint in sub-Saharan Africa outside South Africa. Local content remained low (15–25%, almost entirely seats, tyres, batteries and paint) because the plants were CKD/SKD operations: completely-knocked-down kits shipped from Sochaux, Wolfsburg and Stuttgart, screwed together in Nigeria.
The model worked only as long as the oil money paid for the kits and the protective tariff kept tokunbo out. Both conditions ended at once with the 1986 Structural Adjustment Programme: the naira lost 80% against the deutschmark and the dollar inside three years, and a CKD Peugeot 504 kit that had cost ₦4,200 in 1980 cost ₦68,000 by 1989. The plants could no longer afford to assemble cars Nigerians could no longer afford to buy. Act III is the collapse.
Figure 1
Cars supplied to the Nigerian market, 1960–2024 (thousands of units)
The assembly economy of Peugeot Kaduna and VW Lagos collapsed with SAP. By 2000 nine out of ten cars sold were used imports from Cotonou and Antwerp.