Why Electric Cars Are Not Yet In Nigeria
An interview conducted by Daily Trust Newspaper
General Manager of Mandilas Motors Nigeria, Stephen Gladwin explains in this interview why the auto market fails and why electric cars would not be visible soon in Nigeria. Excerpts:
Daily Trust Saturday: You have been in Nigeria since 2008, what are the dynamics of doing auto business in the country?
Stephen Gladwin: There are so many challenges. I think of the last years, our biggest challenge has been the increase in import duties. We have seen a drop of about 50 percent in sales since I was introduced, I believe the policy is a good policy but the timing, when the policy was implemented was wrong. I am from South Africa and there the auto policy works exceptionally well with full manufacture, complete spare parts specs to finished products and we also export to other countries from South Africa, but that has taken years and years to build on and to work properly. So, for the Nigerian government to expect companies or brands to have knocked down factories within a short space of time with the commitment and training of staff is just unacceptable as far as I am concerned.
DT: What has been the biggest challenge you encountered in Nigeria?
Gladwin: I think the different aspects to the challenges I find if I am talking broadly, the likes of finance in Nigeria. I was also here in 2004 and 2005 but for a different company, and then finance was non-existing, but the challenge is the banks take some weeks to answer and that is far too long and very frustrating. The other challenge is the interest rate. It is exceptionally high. Just put the heat on the prices on the ordinary man on the street, obviously the price of the vehicle is higher than the man on the street; the consumer has to pay more. So it is affecting the whole industry.
DT: Despite the increasing prices that you said crippled you last year, Toyota was still able to have the highest sales; how did you manage that?
Gladwin: Fortunately, the brand has a worldwide acceptability and especially in Africa, it is a vehicle that lasts. Other vehicles coming are seen as inferior brands to Toyota. They are not seen to last longer. Although, initially, you might pay more for your Toyota, but in the long- run you pay less because your servicing and the spare parts are cheaper than the other brands, and customers don’t see that. Sometimes when they buy, they buy at a cheaper price, but it costs them more later. We have to educate our customers and we do that. The other bonus I will say from Mandilas’ point of view to our customers is that we have the biggest spread of branches of any brands not just Toyota, in Nigeria. At the moment we have 11 self-owned branches, sales service and spares in every single branch and there is no any dealer that can contest us of having so many branches.
DT: Recently, a prominent Nigerians showcased their electric cars. Has Toyota looked into the possibility of manufacturing electric cars in Nigeria?
Gladwin: Yes, Toyota has Prius; it has been overseas for many years now doing testing. It will happen but it is going to take years. Nigeria, I believe, is going places. Like everything, it doesn’t happen overnight. It takes time and having proper infrastructure. You can’t just bring in electric cars when there is no power point anywhere in the country to recharge the batteries. Everyone knew there was election coming up. And there was a lot of waiting to see what was going to happen.
You can invest in a big factory, which cost you a couple of million dollars and a new government comes in and changes the policy. You have lost your investment. So there is a lot of waiting to see what is going to happen. Going forward, I think it is a good idea that we create this SKD factory, but done at our time and with commitment from the new government and I think it will work. It is going to create jobs, which is great, and it will also has positive influence on other vehicles that we import if we have our own SKD factory.
DT: Where then do you see the future of auto business in Nigeria?
Gladwin: I see a good future for it.
DT: Does the company have a sustainable future in a developing country like Nigeria given the income disparities of its citizenry?
Gladwin: Mandilas has been in this country since the early 1950s. It is a well-established company. This company is not going anywhere. It is not going to be closing down. As you can see in front of us are all these trophies, this was from Friday evening, The Toyota Nigeria Yearly Award, where we once again got the service manager of the year, we got the best dealer shop, first runners up to best part manager, best after sales customer service of the year, so this is proof of where Mandilas is going.
DT: Can the auto industry in Nigeria survive despite government’s lack of support?
Gladwin: Yes, it will survive, most especially your question about Mandilas’ case, we will survive. The reason why we can survive and why we have survived since the implementation on 5th of June is because of our structure, our services. There are some dealers who are battling maybe because they have one or two workshops, so the income from the workshop for them is very small, whereas we have 11 workshops. We also have paints and do body repair, external damage and all that we have also got that, this has helped us to survive.
DT: Mandilas has been in Nigeria since the 1950s but it seems to have a low profile with Nigerians these days, what are you doing about this?
Gladwin: Any brand, you have to keep in the public and hence we are doing something about this. For now I still sometimes get people say to me ‘oh you sell Toyota, you used to sell Skodas or you use to sell Volkswagen.’ You can see the picture hanging there. Mandilas used to produce Volkswagen in Nigeria, so it is important to keep the brand name alive out there and because it is not just Toyota, we also do Carrier air conditioner, and Carrier air conditioner is like the Rolls Royce of air condition so we have got two top brands, Toyota and Carrier air-conditioned which is good, however, once again, we have to be careful where we spend our money and advertising is very expensive, but we are looking more towards electronic media as well, we have to spend money wisely and the reason why we haven’t advertised a lot in the last two, three years is that we are spending money on our branches. We want to develop our branches and bring people here for training to bring our after sales service up to a certain level which is more important.
DT: What’s the difference between auto business in Nigeria and South Africa?
Gladwin: There is a big challenge in that a lot of people when they open up in Nigeria they have a certain business model that works for them whether it is South Africa, UK or anywhere, and want to introduce that model here, it is not going to work. This is where people make mistake. People come here with their own ideas and they want to push those ideas onto Nigerians, instead of coming here, listen, talk to people and see how business works and then adapt their model.
I will give you an example, about four and half years ago, I opened the first proper used car division in Nigeria, not just Toyota. When I spoke about starting the used car division because in South Africa every dealer-shop has a used car department attached to them, because they work hand-in-hand; when I wanted to start it here people said it’s not going to work and I said why? They said because you can buy Tokunbo cars off the street corners or wherever. I said that is fine. But I said that Tokunbo car will not have a warranty. I sell my vehicle here with warranty and even so that Stanbic (IBTC Bank) finances my used vehicles for customers because I trust the quality of my vehicles and if something goes wrong with the vehicle, Mandilas is here to fix it. Whereas Tokunbo cars, you buy and go, you don’t come back. It has been working so well that I don’t have enough stock.
DT: And the prices are okay?
Gladwin: The prices are fine. The reason I don’t have stock is Nigerians are not used to the concept of trading a vehicle in to buy a new one. We would soon come to that. But they are used to the system of rather sell it to someone who gives it to a sister or brother instead of trading the vehicle in.
The other difference is that a lot of companies in Nigeria, I would say about 98 percent, when they dispose of their vehicles, they give them to the staff at reduced prices or as incentive; in South Africa, those vehicles are sold to the motor traders. That is why I couldn’t get a lot of stocks from companies.