On the morning of December 19, a powerful Nigerian business executive was surprised to find agents from the Economic and Financial Crimes Commission at his doorstep. The arrest of Innocent Ifediaso Chukwuma made headlines across Africa; as international news bureaus picked up on the story, many people were surprised to learn about Innoson, an automaker proud to be 100 percent African.
Economists often remark that operating an international airline and manufacturing vehicles are two signs that a country is on the right path towards development. Innoson Vehicle Manufacturing has been in operation for about eight years. The company is the realization of Mr. Chuckwuma’s personal dream to one day see gleaming, African-made vehicles on the road instead of a glut of European and Asian used cars, known as “tokunbo” in Nigeria.
Mr. Chukwuma started off manufacturing motorcycles with Asian parts more than three decades ago. His initial venture was successful enough to progress into car manufacturing. These days, Innoson is a bona fide African brand that has rolled out more than 10,000 new automobiles manufactured in a plant located in Nnewi, a major industrial center in the southwestern state of Anambra.
Nearly three quarters of all parts used to build Innoson models are produced in Nigeria; the rest are imported from Asia and Germany, which is a common practice in the auto manufacturing sector. The company employs 7,000 people and distributes its cars to more than 20 African countries. The Innoson models range from sedans to SUVs and from pick-up trucks to passenger vans. The company also manufactures the model 5000 bus for public transportation.
In early December 2017, Innoson announced its plans to manufacture a new model that will compete against the sizable tokunbo market of Asian compact cars across Africa. The new car will be unveiled in January, and it will feature certain perks such as air conditioning and a dynamic automatic transmission gearbox.
Although Innoson has achieved considerable success due to lack of competition in the Continent, the company has faced major challenges insofar as trying to find a “sweet spot” in a market where many buyers will prefer tokunbo because that is what most drivers can realistically afford.
The aforementioned arrest of Mr. Chukwuma apparently stems from a long-running dispute with a major Nigerian bank that claims his company falsified documents for the purpose of getting tax breaks from Nigerian revenue collectors. Some business analysts in the country believe that the feud between GTBank and Mr. Chukwuma is more personal since the financial institution has been steadily increasing the service fees it collects from financing deals extended to Innoson. The analysis in social media is different as many Nigerians believe that Mr. Chukwuma has political ambitions that have attracted the attention of GTBank executives who may have similar goals.