The Managing Director, Lanre Shittu Motors, Mr. Taiwo Shittu, who recently bagged the Vanguard Newspaper Auto Industry Icon Award, speaks in this interview on the high cost of new vehicles, available options, the national auto policy, and challenges facing automobile assemblers, among other issues.
What is your assessment of the truck segment of the automobile business in Nigeria? And why the shift from Western brands to Chinese?
The first thing you consider in this automotive business is the value to the customer and the return on investment – both for the customer and the distributor. Those trying to sell trucks should put themselves in the users’ shoes. Everything is give and take. The cost of a truck from a Western country can buy almost four units in China. And the truth is that Chinese brands are already here, running shoulder to shoulder with the Western ones.
Gone are the days when people used to say Chinese brands were “upcoming.” They are no longer upcoming; they are here now and doing wonders on the roads. They are pulling their weight and making their way into the United States, doing very well. They are now global products with a high rate of return on investment.
We have trucks we sold to customers 11 years ago, and they are still on the road, performing excellently – from Lagos to Bauchi, Gombe, and other places.
Are Chinese vehicle brands not cheaper because they are perceived as inferior to their Western counterparts?
They entered the market with lower prices to gain acceptance. That was a deliberate strategy. Now, they’ve achieved that goal and are penetrating markets globally.
At Lanre Shittu Motors, we saw the opportunity years ago. We knew Chinese brands would take over the truck business in Nigeria and beyond. Now, they are the fastest-selling and have the highest sales numbers, looking at last year’s records. Everything is about vision. To succeed in any business, you must be visionary. You must have an idea of what will happen in the next 10 years in your sector.
It was obvious what would happen in the auto sector, considering inflation, the devaluation of the Naira, and the general state of the economy both in Nigeria and globally. For instance, a house sold for about £300,000 in London 10 years ago is now worth about £1.4 million.
During inflation and economic downturn, people naturally gravitate towards more viable options. And in the truck business in Nigeria, that viable option is the Chinese brand.
How do you feel being named Nigeria’s Auto Industry Icon at the recent Vanguard Awards? And what do you think informed your selection?
First of all, I give glory to Almighty Allah for making this honour possible. Sometimes, you may have a vision, but people, the economy, or circumstances might hinder its actualization. In my case, the vision came from our late Chairman, my father, Alhaji Rasaki Olanrewaju Shittu, who conceptualized it, nurtured it, and was blessed with the right team. That is a rare gift.
I feel honoured by the award. It is also a challenge – a reminder that I must do more. People are looking up to me, and I’m encouraged. I dedicate this award to my late father. He was visionary and groomed us to stand on our own. I remain indebted to him.
What do you consider one major thing the government can do to improve the auto industry?
I know some people are relocating due to economic challenges, but many Nigerians and companies, including LSM, still believe in this country. The best way the government can support those of us in the auto sector is to fully return to the auto policy. The government should incentivize investors to keep us in business. Without proper incentives, the sector cannot grow or contribute meaningfully to the national economy.
We need better incentives for players in the CKD (Completely Knocked Down) and SKD (Semi-Knocked Down) categories.
In Kigali, Rwanda, a Ghanaian was showcased as Vice President of AAAM (Africa Association of Automotive Manufacturers), not a Nigerian. What can Nigeria do to regain the confidence of Original Equipment Manufacturers (OEMs)?
To attract investors, you must guarantee their investments – and you can only do this with a clear, well-articulated policy backed by law. One of President Bola Tinubu’s campaign promises was to improve the automotive sector. He has already started by introducing CNG-powered vehicles to reduce transportation costs. We are part of the PI-CNG team and have converted many high-capacity buses for the NURTW and other users. These buses are already running, including as airport shuttles. More CNG and electric vehicles from us will be introduced next year.
To get OEMs interested, Nigeria must have a robust auto policy supported by legislation signed by the President. Nigeria’s auto sector can serve all of West Africa – we have the capacity to become the region’s automotive hub.
Do you think the National Assembly is doing enough in this regard?
Industrialization is one of the current administration’s key agendas. The auto industry is central to any country’s industrialization effort.
To fully develop Nigeria’s auto industry, the auto policy must be revived and supported by strong legislation. I believe this government will act, especially as it’s part of their manifesto. That’s why we are positioning our new assembly/manufacturing plant in alignment with the new auto policy law, which has passed second reading in the National Assembly.
Competition in the industry shouldn’t be with “briefcase businessmen” who come in with nothing but sell fully built vehicles. Government should encourage real investors – those who invest in the country, not just import, stock in warehouses, and sell.
Empowering local industries is critical to economic growth, and this applies beyond the auto industry. But you can’t talk about industrialization without prioritizing the auto sector. I believe President Tinubu’s administration is on the right path, and we are positioning ourselves to take full advantage.
What can be done to reduce the cost of new cars?
The auto policy provides special waivers for SKD and CKD assemblers to make their vehicles more affordable. Similar waivers granted to CNG and electric vehicle assemblers should be extended to other manufacturing/assembly plants. Doing this will lead to an immediate 17.5% reduction in the prices of locally manufactured vehicles.
This policy extension will reactivate dormant assembly plants and create significant job opportunities for Nigerians.
What challenges do you face as auto manufacturers/assemblers and distributors?
Automobile investment is capital-intensive. Success requires a strong infrastructure to support operations. Selling a vehicle is easy; retaining customer trust is harder – especially without strong after-sales support.
Unfortunately, Nigeria often fails to provide adequate incentives to structured businesses. Meanwhile, we have to compete with unstructured dealers – people with no showroom or workshop, who bring in fully built trucks and offer no after-sales service. That’s unhealthy competition.
Is there hope for Nigeria’s auto industry?
Yes, there is hope. As I’ve said, President Tinubu’s agenda is to industrialize Nigeria, and the auto sector must play a key role in that effort.
The government must focus on the auto sector and create a level playing field with special incentives for serious investors. We’re not asking for free money. We want policy stability – the assurance that our investments won’t be jeopardized by sudden policy reversals.
How can the excesses of insincere operators be curbed?
Government must strictly follow existing standards and templates. Agencies like the NADDC know the real players with actual capacity. Some may build plants, but without proper incentives, they can’t operate them effectively.
How do you cope with the current tax regime?
We pay multiple taxes – VAT, duty, levy, and others. These charges are burdensome. I urge the government to extend the same waiver enjoyed by CNG and EV assemblers to the broader auto industry.
That will attract OEMs to invest directly or through partnerships with capable Nigerian firms. All they want is a level playing field and investment protection.
Why are banks reluctant to offer auto finance loans?
Many banks previously regretted offering auto loans. Some customers defaulted, and the banks lost money. This led to their reduced interest in auto finance. Some of us still run such schemes, but not at the scale we used to.
Tell us about the new LSM brand name.
The name LSM was coined to immortalise our father legaacy. I credit my late father, Alhaji Rasaki Olanrewaju Shittu, for laying the foundation. He had a strong team and raised us to prioritize integrity over money. He believed that a good name and character would always speak for you – even in your absence.
We also have a supportive family that is committed to preserving his legacy. Even my 19 siblings who aren’t in the business support its continued success. I thank them for allowing me to lead.
Have you stabilized the company?
Yes, I can confidently say the company is stable. But the vision is much bigger than what it used to be. God remains the driving force.
LSM once spoke of plans to build more auto assembly plants. What’s the update?
The project is ongoing. We’re building and putting everything in place.
When will the next plant be completed and launched?
Early next year. The new plant will cover 40,000 square metres – about 10 times the size of the current one at Amuwo Odofin, Lagos.
What brands do you currently control?
We are focusing more on JAC heavy-duty trucks and our own LSM brand.
In what segment is the LSM brand playing?
LSM is active in the commercial segment – CNG buses, light-duty buses, high-capacity buses, and pickups. We’re accrediting distributors for the LSM brand nationwide. Next year, we’ll introduce LSM CNG and EV passenger vehicles.
