IOSR Journal of Business and Management (IOSR-JBM) e-ISSN: 2278-487X, p-ISSN: 2319-7668. Volume 22, Issue 6. Ser. III (June. 2020), PP 01-06 www.iosrjournals.org DOI: 10.9790/487X-2206030106 www.iosrjournals.org 1 | Page Impact of Government Policies on the Development of Automotive Industry in Nigeria Yusuf Chiromawa Usman 1 , Dr. Cross Ogohi Daniel 2 1 Department of Business Administration,Faculty of Management Sciences Nile University of Nigeria,Abuja, Nigeria 2 Department of Business Administration,Faculty of Management Sciences Nile University of Nigeria,Abuja, Nigeria Abstract: Automotive industry is very symbolic in a lot of countries. It is such a large employer and source of pride in many local economies. Hence the Federal Government of Nigeria introduced the Nigerian Automotive Industry Development Plan (NAIDP) in 2013 to revitalize the auto industry. Therefore the main objective of this research work is to examine the impact of Government Policies on the development of automotive industry in Nigeria. Outcomes from the test of hypotheses indicate a certain level of impact of the government policies on the development of automotive industry in Nigeria. However, the National Automobile Design and Development Council (NADDC) need to put more efforts on ensuring the full implementation of the various policies put in place for the development of automotive industry in Nigeria. In this regards, the following recommendations are made: (i) continued policy support by the NADDC towards implementation and enforcement aimed at protecting the auto industry to ensure steady growth and development, (ii) improved chances of owing a car through a favourable vehicle financing options in order to encourage patronage of locally assembled vehicles, (iii) tightening the border, (iv) setting up auxillary industries, and (v) building of human capital. Keywords:Government Policies, Development, Automobile Industry, Nigeria --------------------------------------------------------------------------------------------------------------------------------------- Date of Submission: 22-05-2020 Date of Acceptance: 09-06-2020 --------------------------------------------------------------------------------------------------------------------------------------- I. Introduction Automotive industry in Nigeria begun in the 1950s comprising the production of both passenger and commercial vehicles. The beginning of production was by Federated Motors Industries, a subsidiary of United Africa Company with the assembly line of Bedford TJ Trucks. Also amongst the early production was SCOA’s production of Peugeot 404 Pick-ups all for commercial purpose. In the 1970s, that is during a period of oil boom in Nigeria, a significant development in the auto industry begun, whereby the Federal Government of Nigeria signed joint venture partnership with some foreign car manufacturers to assemble vehicles and provide technical assistance towards vertical integration within the local industry. However, these foreign brands gradually dominated the auto industry from the middle of the 1970s to the end of the 1980s. The passenger vehicles brands were Peugeot 504 assembled by Peugeot Automobile Nigeria Limited (PAN), Kaduna in 1975 and Volkswagen 1300L assembled by Volkswagen og Nigeria Limited (VWON), Lagos in 1978. While the commercial vehicles manufactures- Anambra Motor Manufacturing Company Limited (ANAMMCO), Emene-Enugu (1980; Steyr Nigeria Limited, Bauchi, National Truck Manufacturers (NTM), Kano (Fiat); Leyland Nigeria Limited (LNL), Ibadan. From 1970 to 1980, total production capacity of the Nigerian Automobile industry projected was about 108,000 cars, 56,000 commercial vehicles (Trucks) and 10,000 Tractors, 1,000,000 Motorcycles and 1,000,000 bicycles annually. The strategy was to encourage backward integration with the mills in tow. This establishment translated the country into quick development. The period during the establishment of the assembly plants coincided within a dynamic period in the global automobile sector. The automobile sector in Nigeria was projected to be a vital component of the national economy, contributing to overall economic development through capacity building which was made possible by technology transfer, and job creation. In 1982, the Federal Government of Nigeria completed another set of agreement with five manufacturers for the establishment of the following five height commercial vehicle assembly plant: Mitsubishi in Ilorin, Nissan in Minna, Peugeot in Gusau, Isuzu in Maiduguri and Mazda in Umuahia. But these were not established, though General Motors (GM) subsequently entered into partnership with UAC to produce Isuzu by FMI of UAC, which later became GM Nigeria Ltd. With the introduction of the Nigerian Automobile Industry Development Plan (NAIDP) in 2013 to revitalize the Auto industry, there has been increased activity in local vehicle assembly. The National Automobile Design and Development Council (NADDC) granted thirty five companies licenses to