AvtoVAZ, Russia’s largest automaker and majority-owned by the Russian government, is making its move into Nigeria as part of a broader strategy to diversify beyond its home market. The company plans to establish a spare parts hub and service center at the Lekki Free Trade Zone in Lagos before the end of 2025, marking its most ambitious push into West Africa’s largest economy.
In addition to this, AvtoVAZ is in talks with the Nigerian government to set up a local assembly plant. This move could strengthen its long-term presence in a country where new car sales are significantly outpaced by demand for used vehicles.
This expansion comes as AvtoVAZ faces increasing competition, particularly from Chinese automakers who are enhancing their presence in Russia amidst ongoing ceasefire negotiations between Russia and Ukraine. For example, Great Wall Motors plans to increase its production capacity in Russia from 150,000 to 200,000 units by 2025, and both Hyundai and Renault are reportedly preparing to return to the Russian market following a potential ceasefire agreement.
Seeking new opportunities, AvtoVAZ is eyeing Nigeria’s rapidly growing, yet still underdeveloped, automotive sector. Annual vehicle demand in Nigeria stands at around 720,000 units, but local production only meets about 14,000 units.
The company is also looking to tap into Nigeria’s push for alternative fuel vehicles. It has plans to partner with a Russian engineering firm to establish a compressed natural gas (CNG) conversion plant, enabling Lada cars to come with factory-fitted or locally converted gas-powered engines. According to Adewole Opeyemi, AvtoVAZ’s representative in Nigeria, “If you bring CNG cars to Nigeria, you don’t pay any duties, which is why we are in talks with the relevant agencies.” Some Lada cars will arrive with factory-fitted gas-powered engines, while others will be converted locally by Russian specialists.
AvtoVAZ, known for its Lada brand of affordable cars, SUVs, and commercial vehicles, has had a presence in Africa since 1999, shipping around 100,000 cars to the continent. Its first significant venture in Africa was a partnership with Egypt’s Amal Foreign Trade Company, where they began assembling Lada vehicles at a local Suzuki plant in Cairo. Over time, the focus shifted from the Lada 2107 model to the 2110 model.
In December 2022, AvtoVAZ announced plans to export 20,000 vehicles in 2023, with an emphasis on expanding into new African markets. Ethiopia, in particular, has emerged as a key target, and in 2023, AvtoVAZ signed a letter of intent with Ethio Engineering Group to begin local production of Lada vehicles.
As AvtoVAZ’s Head of Product Marketing, Artem Aglichev, said, “We are witnessing a new wave of diplomatic cooperation between Russia and African countries. Nigeria, as the region’s biggest market, simply cannot be overlooked. Opportunities are opening up for us, and we’re ready to explore them.”
Nigeria’s automotive industry is heavily reliant on imports, particularly used vehicles, though local manufacturers like Innoson Vehicle Manufacturing, Peugeot Automobile Nigeria (PAN), Coscharis Motors, and GAC Motors are present. Foreign brands dominate the market, with Toyota holding a 16.1% market share due to its reputation for durability and readily available spare parts. Japanese brands like Toyota and Honda control almost a third of both the new and used vehicle market, while South Korean brands Hyundai and Kia are gaining traction with their modern designs and competitive pricing.
Aglichev is confident about AvtoVAZ’s future in Nigeria: “As a state-owned company, we fully understand the regulatory requirements and are committed to local assembly. Nigeria has been a strong player in this field since the 1950s, with skilled labor, logistical capabilities, and economic feasibility. This is a logical and reasonable step, and we are confidently moving forward.”
While AvtoVAZ’s plans in Nigeria are ambitious, it will face challenges, including regulatory hurdles and stiff competition from local and foreign players. Whether its affordable Lada models can carve out a niche in a market dominated by second-hand imports remains to be seen.
Follow us for more updates on this exciting development.
Leave a Reply