Nigeria’s auto industry dreams need funding, power, stability to become reality

Nigeria dreams of building its own cars. The idea is simple: more local factories, more jobs, and cheaper vehicles for families. But the road has been rough. High costs, poor power supply, and weak investor confidence weigh down the industry.

Today, Nigeria has over 30 licensed auto assembly plants, but local production meets less than 10% of demand, forcing the country to import most cars. That creates huge pressure on foreign exchange, with billions spent each year on imports. “We have the talent, but the system holds us back,” said an industry executive in Lagos.

This is why the Nigerian Auto Assembly Summit 2025 matters. It brings together car makers, government officials, banks, and investors to confront the industry’s five toughest challenges: funding, infrastructure, import duties, skills, and market trust. The hope is to turn years of talk into real action.

Nigeria’s car assembly industry stands at a crossroads. It holds the promise of jobs, industrial growth and cheaper vehicles. But without urgent reforms, it risks stalling before it can take off.

The Nigerian Auto Assembly Summit 2025, set for later this year, aims to provide answers. Industry leaders, banks and government officials will gather in Abuja to chart a new path. Their agenda is to provide a platform to tackle the five biggest hurdles slowing local car production, including:

1. Funding woes

Car makers in Nigeria face a major financial squeeze. Banks charge interest rates that often exceed 25%, collateral demands are steep, leaving many firms stranded. “Funding is the oxygen for any factory,” said Ibrahim Olaye, a Lagos-based analyst. “Without affordable loans, we cannot grow. We need development banks and investors to step in to provide low-cost loans, credit guarantees, and a new auto financing window.”

2. Infrastructure bottlenecks

Factories rely on steady power and efficient roads, but Nigeria struggles with both. Blackouts force auto plants to spend millions on diesel generators. Poor road networks delay spare parts and finish cars. A 2024 industry report estimated that logistics costs eat up 18.5% of total production expenses. The summit will push for public-private deals on roads, ports and power grids, and industry watchers say even small improvements could slash costs and boost competitiveness.

3. High import costs

Despite government promises, duties on imported car parts remain steep. This makes local assembly more expensive than buying ready-made vehicles from abroad. Industry insiders say this gap fuels smuggling and weakens trust in local brands. Summit discussions will center on tariff relief and tax holidays. “We don’t need permanent protection,” said one executive. “We just need fair ground to compete.”

4. Skills shortage

Nigeria lacks enough skilled technicians for modern auto assembly. Training schools are outdated, and few young people see factory jobs as attractive. Automobile manufacturing firms can roll out vocational centers and apprenticeships,” Olaye said. “By working with schools, they can train thousands of new workers over the next five years.”

5. Low market trust

Consumers remain wary of “Made in Nigeria” vehicles. Many doubt the quality, durability and resale value. This distrust keeps local sales weak, even when cars meet global standards. The summit will push for strict quality control and a national certification scheme. Organizers believe this could change perceptions and boost confidence in local brands.

The challenges are real and heavy but the Nigerian Auto Assembly Summit 2025 is a chance to move from talk to action. If funding opens, roads improve, tariffs ease, skills rise and trust grows, the industry could spark a new wave of industrial revival. The outcome will shape not only Nigeria’s car market, but also its economic future.

Read more on 5 reasons you should attend the Nigerian Auto Assembly Summit 2025