Cars, trucks, buses, etc. name them, the importance of vehicles and the roles that they play with regards to transportation and everyday living cannot be understated. When the impacts and the importance to economies on a larger scale are considered using Japan, China, the US and France as some notable examples, the significance of vehicles and the auto industry is even greater. In the US for example, the auto industry alone is responsible for adding some eight million direct jobs to the US economy and bringing in hundreds of billions of dollars in revenue and profits. In China the story is also similar with the Chinese auto industry being so globally acclaimed that it is currently believed that one of every four vehicles produced on earth today is made in China. In addition to the economic impacts, the auto industry is also important as advances made by auto engineers and research scientists have also been adapted to other fields of knowledge with the industry itself adapting advances from others; teaching new tricks to palpable old dogs and making itself into the veritable force and indicator of human advancement we know today. The knowledge gained form building vehicles has also redefined to some extent the way we create the laws that we live by as a society. For example, for vehicles produced in Europe, the EU mandates that, to promote the recyclability of a vehicle, it must be built in such a way that thirty minutes is all the time required to completely dismantle. There also are impactful pollution control and fuel quality laws which have been made using the discoveries from auto engineering. The auto industry is obviously one with a wide reach that touches many facets of life as we know it – positively and negatively.
Random Car Fact #1: Did you know that the Toyota Corolla is the best-selling vehicle of all time having shipped out some 43 million units globally since it commenced production in 1966?
To consider the Ferrari as a brand that brings together many of the factors considered herewith and after, from innovation, to adding value while underscoring macroeconomic significance of the brand. Created in 1939 by that man Enzo Ferrari, Ferrari makes some of the most coveted sets of vehicles on the planet today costing hundreds of thousands of dollars to acquire even on the second-hand market. As a mark of innovation, the average Ferrari sports a V8-V12 engine, with a capacity of between 4.2 to 6 L producing up to 1000HP on some models which propels the vehicle from 0 to 100KMPH in under 4 seconds. Weighing in around 80-120kg (bag of rice for scale) and comprised to more than 80% of aluminium however, the composite alloy that is used in making the whole engine is a closely guarded secret known to just a few within the Ferrari organisation – if keeping secrets isn’t one of the most Italian things one can do after making incredible pizza and pasta, then colour me blind. However, more recent iterations of the Ferrari have evolved from steel and aluminium chassis, to models made using significant amounts of carbon fibre, adapting aeronautic technology to assure its rigidity, maintain its characteristic design and shape but also remain sturdy enough to carry the entrails of the vehicle while protecting the driver within it and reducing the overall weight of the vehicle which translates to lesser work for the engine and an overall more powerful automobile. As one marker of the level of sophistication and the attention to detail that goes into making a Ferrari, the engine’s airflow and exhaust systems, as notable examples, are so intricately tuned by technicians and engineers but under strict supervision and guidance by expert creators of flutes and musicians; this way, when it is said that the Ferrari’s engine sounds like “music to the ears”, it might be a tad more literal than the average person understands. In all, the Ferrari has maintained its connection to its Italian roots, remaining one of the proudest products to come out of Italy. Even when assembled in the US, the Ferrari’s owner’s manual is written in Italian as its primary language and has a large share of its profits repatriated to Italy. The raw materials required to create a new Ferrari from scratch actually cost around six hundred dollars to around a thousand dollars, the reason why the finished vehicle costs in the hundreds of thousands is simply for the ingenuity that has been put into the cheap raw materials transforming them into an engineering work of art.
Random Fact #2: well, did you know that Pasta, one of the hallmarks of Italy and one of the things Italians hold so dear, wasn’t actually created in Italy. The Chinese own that honour.
From the first models of the automobile; the horseless carriage, that came into existence around the end of the nineteenth century and was mass produced by Henry Ford, the general structure of a vehicle has seen a number of changes that would not need to be enunciated. From wooden frames which were cast away in favour of more durable and less prone to decay light steel frames; to loud and noisy vehicles giving way to the almost silent internal combustion engines. Cars have gone from being these boxes that contained people who wanted to be transported between two different points to these sleek contraptions that speak of the personality of their owners and equipped with advanced technological inventions like airbags and anti-collision sensors that attempt to save the lives of people who might otherwise be involved in fatal vehicular collisions. Personally, I look at the way vehicles have evolved over time and apply the situation to those who stand as detractors of the theory of evolution. While it might not be entirely similar, the obvious parallels cannot be ignored but one might wonder, like it had been theorised that the current expression of our species has its origins in apes/apelike creatures: would a vehicle as beautiful and technologically advanced as the S550 or even the F015 Benz today, agree to having its origins in some old, loud, rigid, piece of wood with wooden wheels, no windows, uncomfortable seats and such weak, primitive and noisy engines? Evolution.
Random Car Fact #3: Did you know that electric vehicles are not new and that the first electric vehicle was actually created in 1905?
The journey from start to finish for most autos, takes an average of around 15-18 hours but for luxury vehicles like the Rolls Royce, building and assembly could take as long as a week per unit. According to Toyota, the different sections of creating the composite parts of a vehicle can be divided into stamping, welding and painting. The final two parts are the assembly and inspection. The first three are the points where most of the research, development, material, energy and human resources usage go in. Although some carmakers stick with making all the composite parts of the vehicles in-house and usually under different sections of their facilities (like the Ferrari), others like Toyota have created a business model out of outsourcing the production of components while the main company remains responsible for their assembly; a model that was arguably copied by Apple and redeveloped to fit their corporate goals in the smartphone market. Very few production vehicles are made with handmade components. These parts are usually either made using moulds, especially in the case of the engines and many of the encasing structures and housing components while, for the rest, especially the moving parts like the pistons, the bearings, differentials, shock absorbers, etc. these are made through specialised machining processes. In others, the two processes of moulding/stamping and machining are combined to maximum effect. The greater share of these structures are primarily made of steel and aluminium which is bought in blocks and melted before being passed through either the moulds or cut into shape by machine processing after which related parts are either screwed together or welded as the second part of the building process. Alternatively, these metals can be purchased as pure power and manipulated into the desired forms by the vehicle manufacturers. The global market for steel has seen significantly volatile periods with the inputs from Chinese manufacturers seemingly invading the market and flooding it with otherwise cheap products, however, from resourcing the ores to smelting, refining and alloying into the desirable finished metal, exists a global refined metal market worth more than a trillion dollars (Steel: $700bn+; Aluminium: $200bn+; Copper: $150bn, and these are just three examples that make up the largest share of metals used in vehicle manufacture). Additionally, there is also a market for recycled metals projected to be worth more than $450bn by 2020. This quite simply goes on to show that the value chain that takes a few lumps of metal ores to refined metal and eventually to the compendium of moving parts, bolts and screws that is a working vehicle, without even considering the financial imperatives of the global auto market itself, is literally worth trillions of dollars and underscores the economic impacts in terms of value, cash and jobs. Nigeria has always boasted a few of the reserves from where these metal originate and facilities like the Ajaokuta Steel Company although still technically maintaining a struggling existence, show that at some point these factors were keyed into for the good of the Nigerian economy. Historically, one might still remember that there is a place in Lagos called “Volks” that used to be site of a Volkswagen factory although the facility has been shut down for more than a decade now. Carmakers like Kia and Peugeot still maintain working factories in Nigeria although businesswise, the continuity and sustenance of their business seems counterproductive due to the astronomical costs of maintain a supply/value chain while car sales remain desperately abysmal.
Random Car Fact #4: Did you know that are currently around a billion cars on earth? And that the average car has around 30,000 individual parts?
Other than just the metallic elements of a vehicle, there exist a whole myriad of others including fabric, foam and leather used in the upholstery; batteries; the wiring and electrical systems; computer systems e.g. brainboxes, screens, dashboards; specialised glassware e.g. windshields, windows, mirrors, fluids like coolants, brake oils, clutch and transmission fluids and engine oil, etc. that make up some of the reasons why the US auto industry can boast some eight million direct jobs. But even added to that, the patent licensing business is another and perhaps one that usually flies under the radar but should in fact be worth more attention that it is given. Considering the fact that considerable time and resources go into the research and development of the technology that has continued to improve driving experience, the cost of acquiring a license to legally employ an idea or technology developed by a different party may run to the tune of billions. In the instance that they are developed and registered under major corporations, exclusive right may be retained to grant unique selling point to the issued party. As of today, the patent wars in vehicle production centre around topics like battery technology for electric vehicles, navigation technology, detection and autonomous driving for which companies like Tesla, Google and Apple appear frequently in the news.
Random Car Fact #5: Did you know that the brands Bentley. Bugatti, Lamborghini, Audi, Porsche and Ducati (power-bikes) are ALL owned by Volkswagen (which is actually owned to a large share by the German Government)
In the case of Nigeria, reviving the auto industry joins the endless list of things easier said than done as there are a lot of factors to be addressed and a considerable lot of time to be spent before the country might regain a competitive edge in the auto business. Most effectively, recognising the desired results and working backwards while proffering sustainable solutions until the starting point is reached would be the easiest way to identify problems and their solutions along the value chain. The biggest issues to be contended with are arguably not the availability of technology, (although this would remain a slight issues depending on the approach chosen to filling this specific gap) or infrastructure but the strength of the local consuming market. To highlight the situation elsewhere, as at 2016, the US stood as one of the largest auto markets with a car ownership rate of 88 vehicles per 100 residents, in Germany, there were 85 vehicles per 100 residents. In Finland, one could say there were more vehicles than people with a ratio of 102 vehicles per 100 people while for Nigeria, there is a modest estimate of around 6.3 cars per 100 residents according to the NBS, with more than half being commercial vehicles. When new car sales are considered, in 2017 alone, the US managed more than 15 million sales while China shipped out more than 16 million new vehicles to new owners both countries having less than 5% of their production quota marked for export. In 2017, Nigeria bought (or sold?) just around 20,000 brand new vehicles. Interestingly enough, the FRSC noted in 2016 that there were 10.6 million vehicles in the country, compared with the 11.5 million quoted by the NBS in the last quarter of 2017, there is a difference of around 900,000 vehicles which neither reflects in provided sales or registration data. According to PwC, 70% of vehicle registered in Nigeria are to some degree, used vehicles and it is to this that the crux of the issues affecting the profitability of the auto industry in Nigeria boils down. While the population dynamics have been touted by local economists and politicians alike as being large enough standing at over 190 million, the purchasing power of the market is one very important detail that somehow gets silenced. With over 70% of the population currently living below poverty lines, almost 150m of the 193m reported by the NBS can be safely excluded from being eligible as potential customers for the auto market – either new or used. The rest 43m that makes up the true potential market, when factored in with the vehicle ownership statistics, put the rate at around 26 vehicles per 100 residents; 53% of which are commercial. The point builds up to challenge the federal embargo on the importation of used vehicles “in an effort to stimulate the production of local vehicles”. However, the current market is barely cracking 20,000 sales a year combined to just over 40,000 when used vehicle registrations within the country are added, from the point of view of any vehicle manufacturer, this does not make for any kind of a profitable market. The current economic situation and practically one which has persisted for over a decade is not exactly the kind to attract any kind of investment to the industry (Fun Fact: IN THE LAST 10 YEARS, Nigeria has only bought less than 200,000 brand new vehicles). Local manufacturers like Innoson Motors have also advised the provision of credit schemes to facilitate the development of a stronger customer base but under the current conditions, one might argue that even with strong credit facilities available, the majority that embodies the bulk of the potential target, still would be unavoidably left out. To further compound the issue, the 43 million that makes up the market is further reduced when the population of those either too young (under 18; the legal driving age compared with the US where the legal driving age is 16. One sees that the age was probably chosen, to allow more potential entrants into the auto market) or too old to be in the market target range, are excluded. Making a modest estimate using population markers puts the viable market even lower at around 15-18 million with the likelihood of purchasing a new vehicle standing around 0.0036 – 0.0072% before even considering other issues like the employment statistics and those already owning at least one vehicle. Perhaps revising the existing legislation around vehicle importation might be a way to go as the current system and the high costs of customs clearance most prominently encourages smuggling through which the country losses substantial sums of money annually.
Random car Fact #6: well, did you know that the first recorded vehicle accident was in Ohio, US where even though there were just two registered vehicles in the whole of the state, they still somehow managed to run into each other
Alternatively, following the model set down by Tata Motors, after playing host to companies like Mercedes Benz and Volkswagen, learning the technicalities and reproducing the results, the Indian auto giant was established and set out to produce cost effective vehicular units and mass transit vehicles structured for the Indian market. For any industry to exist, there must ordinarily be a customer base to whose need they work to fulfil. Regarding the auto industry, this particular argument is supported by both the US Department of Labour and data from the Chinese auto industry. While this might be the bane of the auto market regarding small and light vehicles in Nigeria, perhaps rather than small and light vehicles, the focus on local vehicle manufacture should be on mass transit vehicles where a strong market exists through programmes like the BRTs in Lagos and other government owned/assisted mass transit schemes, while the general production of spare parts (for small and light as well as mass transit and heavy duty vehicles) as a means to stimulate innovation, adding value to locally produced raw materials and create local jobs may be encouraged and additionally, the general cost of vehicle maintenance might be reduced. As far as the auto industry goes it might be safe to infer that the presence of a strong local demand is the most important factor affecting the strength of the industry and this the main factor to be overturned before the auto industry in Nigeria can be revived. Following this line, it stands to reason that major carmakers based in the US, Asia or Europe, would aim first to meet local demand while sending spill-overs to tertiary markets.
Random Car Fact #7: Electric cars are so quiet that electric carmakers have to fit fake engine noise speakers in the hoods just so people may know that a vehicle is approaching. And in the early 1900s, horse poop caused so much pollution that the automobiles were encouraged as a green, environmentally friendly alternative.
In conclusion, there are a myriad of factors that affect and are affected by the auto industry which has made it one of the most formidable pillars of innovation that any country can boast. These include good old national pride, economic buoyancy, inventiveness of the resident population, etc. One may see expressions of these when the idea of German or American Engineering for example are mentioned; one of the first things that comes to mind undoubtedly would be names like Mercedes Benz, Ford, Chrysler or even Cadillac. A single sector accounting for 5% of the workforce in the US, around 1% of the total German workforce where it generated more than $500bn in 2015 alone (Nigeria’s GDP for scale). In Japan, the home of brands like Lexus, Toyota and Honda, 5.5 million people are employed by the auto industry and the earnings from the auto industry closely follow the Germans. Additionally, the vehicles sales and after-sales industry is still one to be considered if for nothing else, the skills they provide to the society. The development of technological tools like car trading (e.g. cars45), car sharing applications (e.g. Uber, Taxify) some of which have gone on to become billion dollar entities in their own right, also go on to highlight some instances of interdependency between various other commercial components and the auto industry.
Random Car Fact #9: Around 80% of an average vehicle is recyclable and being true to that, vehicles have remained one of the most recycled objects that we have created to date.
With due regards to Innoson Vehicle Manufacturers (IVM), picture this. So, as usual, there is the annual G8 summit. This year’s event is located in Bavaria. It should be G8 but you know the Russians, they’re serving out sanctions and as such, they’re not invited to this one effectively making it G7. There are the big players; the US, UK, etc. all present; we know them all. President Buhari is in the background, clad in an all-black kaftan with his signature brown inner sweatshirt on. The light bouncing spiritedly around the heavily fenestrated, openly spaced and bright sliver room hits him just right and before the rest of the people who surround him as a willing audience, he strikes a glorious figure: wise, forbearing in countenance and salient that anyone could see as he trades pleasantries with his fellow world-leaders, sharing a few jokes while at it – za aza room ya? Outside, the green of the pine trees that so beautifully surround the environment are lush as they sway lightly, the ambience amidst the golden rays of a bright Bavarian morning seems only too well timed as a black IVM G80 quietly rolls up and halts at the entrance of the venue. Angela Merkel steps out to her waiting entourage and she is pensively ushered towards the Buharicentric gathering of world-leaders. Taking notice of her as well as her issued vehicle on which a lascivious gaze lingers a tad too long, Theresa May, PM of the United Kingdom remarks,
“Wow Angie, that is a lovely vehicle you have got there.” to which Ms. Merkel proudly replies,
“I know, it’s Nigerian.”