Taking inspiration for the name from his love for Scrabble, Oluwatobi Ajayi founded Nord Automobiles with a desire to bring affordable and reliable cars to Nigeria. Earlier this year, he won MBA Entrepreneur of the Year at the AMBA & BGA Excellence Awards 2021. Ellen Buchan finds out more about his company and Nigeria’s unique business environment
Oluwatobi Ajayi started Nord Automobiles after realising that most Nigerians did not have access to good quality, yet affordable cars. He was keen to change the mentality of Nigerians, who would only consider buying second-hand foreign vehicles, by ensuring his company provided automobiles that were of a high quality, yet still affordable. He also wanted to create jobs locally.
Ajayi has since been named one of the ‘30 Most Promising Young Entrepreneurs in Africa’ by Forbes. His efforts also enabled him to win gold in the MBA Entrepreneur of the Year category of the AMBA & BGA Excellence Awards 2021. Ambition caught up with Ajayi to hear more about his journey to create this award-winning company.
Why did you set up Nord Automobiles?
I saw a problem, and I decided to solve it.
Brand-new vehicles in Nigeria were either good quality, but expensive or low quality and relatively affordable. Nigerians didn’t have the opportunity to buy a good-quality, brand-new vehicle at an affordable price, hence a lot of people bought used vehicles which offered the quality, albeit from older models, at a fairly affordable price.
However, the age of the vehicles meant Nigerians were not getting a great deal, as these vehicles do not last as long as a brand-new one would and usually had mechanical and electrical problems in about a year. I decided to solve that problem by producing and offering Nigerians brand-new vehicles with world-class warranty, that are durable, reliable, safe and affordable.
How did you choose the name ‘Nord’ for the company?
I was on a business trip in Thailand in 2016 when I realised that I knew the problem I wanted to solve. I knew how I intended to solve it but I hadn’t really thought about the marketing and branding, let alone the name. When I got to my hotel room, I set the criteria of the name.
For me, the name had to be easy to spell, easy to remember, easy to pronounce, sound strong and be a nice, four-letter word. I wanted it to include the letter ‘N’ somewhere to represent its country of origin, Nigeria. I play Scrabble and I decided to form the name using these criteria as I would during a game of Scrabble.
I started with the letter ‘N’. Next, I had to insert a vowel and I preferred ‘O’. If you play Scrabble well, you will know the letter ‘R’ has some properties of a vowel – it’s a consonant that allows you to add another consonant to it fairly easily, so I went for ‘R’. I knew I just needed to add one more letter, a consonant, and I would have a name that met my criteria. For the last letter, I started in alphabetical order. ‘NORA’ and ‘NORB’, I didn’t like. ‘C’ gave me ‘NORC’, which didn’t meet my criteria for being easy to spell and pronounce. ‘D’ gave me ‘NORD’, which sounded good and met all the criteria I set, and that was how the name was formed.
Later, I realised that ‘Nord’ means ‘north’ in some European languages and that this also signifies going up, going green, going well and positivity. I liked the name and I found out that a lot of people, our customers and even the general public, love the name.
In a recent interview, you said a challenge was that many Nigerians prefer not to buy local. Is this trend changing?
Yes, Nigerians [traditionally] do not buy brand-new vehicles regardless of the country of origin. They prefer to buy foreign used vehicles. Nord is changing this culture and trend. Customers come to us to buy vehicles because they would rather buy a brand-new, durable, safe and reliable vehicle than buy a foreign used one that is four years old for the same price. We are making some progress here, but it will take some time, years and maybe even decades, before most Nigerians would prefer to buy a locally assembled, brand-new vehicle. Better pricing from locally assembled vehicles and auto financing would help accelerate this change in trend.
What other challenges have you had to face on your entrepreneurial journey?
There are so many challenges I have navigated, and I am still navigating some. Some are global challenges affecting any automotive business in the world and some are challenges that any business will face in Nigeria.
In Nigeria, the government’s automotive policy is not consistent, and this discourages world-class and serious investment, although I see some signs that this will get better soon. The fluctuation of the foreign exchange market in Nigeria can also wipe away all your profit if you are not experienced enough.
Finance is an issue, too. The cost of finance here is expensive and makes long-term planning and investment difficult – if the funds sourced are from Nigeria. This is one of the reasons foreign-brand cars can do better in some areas, especially in the ability to maintain a high number of stock vehicles.
What is your long-term hope for Nord?
We have a vision of being a global automotive corporation that produces premium vehicles at competitive prices and giving the average African access to owning and driving a brand-new vehicle.
We also intend to make zero emission vehicles a significant part of the number of units sold in less than five years.
How is your business making an impact in society?
We are creating jobs, providing a means for Nigerians to build a future and family.
We offer our customers the opportunity to own and drive brand-new vehicles at affordable prices. Many of our customers are first-time buyers and users of new vehicles. We are working to produce cleaner emission vehicles, and in the next few years we will shift to zero emission vehicles. We are also working to improve the image of our country, Nigeria, and the African continent in the world.
Why is it so important to you that the vehicles you make are affordable?
Nigeria is a low-income society. The high-earning elite are a minority and the majority of Nigerians do not earn much – the middle class in Nigeria earns around $30,000 USD per annum. To reach this middle class, we need to produce vehicles that can retail at about $18,000 USD to $23,000 USD and offer an auto-finance payment plan that allows them to spread the payment over one to three years.
In another interview, you said that playing Monopoly had impacted your view on life and on business. Do you still live by the rules you learnt by playing Monopoly?
Well, I have improved greatly since I was playing Monopoly; I was 15, but the fundamental lessons remain the same. Cash is not very useful if you don’t use it judiciously. You need to use your cash to create solutions or invest it to earn more money.
I have become a better businessman by being an entrepreneur, learning from the day-to-day issues that entrepreneurship throws at you, and attending Lagos Business School for my executive MBA.
What advice would you give to other entrepreneurs who are just starting their journey?
Entrepreneurship is about the creation of value and the provision of solutions to those who need it, in exchange for a reward – usually bigger market share, and profit. You need to provide solutions, focus on that and other things will follow.
Ensure you sell – enough sales solve most business problems. Get to market with your best products or solutions as quickly as possible. Entrepreneurship is difficult but very rewarding when you believe in the value and solution you are bringing to the world. You have to be ready to deal with the numerous challenges you will meet and have to overcome.
Why did you choose to complete an MBA?
I became the CEO of an authorised dealership of Mercedes-Benz at the age of 26. I didn’t have a mentor and, often, I was not very sure about the accuracy of my decisions. I wanted to have a scientific and accurate way to analyse and measure the precision of my executive decisions.
How has doing your MBA at Lagos Business School, Pan-Atlantic University helped you to set up the business?
Doing my MBA at Lagos Business School has been one of my best decisions. It helped me understand the science behind some decisions I make instinctively, which allows me to make better decisions. I also have a better ability to analyse business problems and solve them.
The network in Lagos Business School is great, I have classmates doing excellently in their careers and this helps when doing business among ourselves.
How were you able to get the most out of your MBA experience?
I am usually very busy, so I did the ‘Modular Executive MBA’ at Lagos Business School which consists of one intensive week every two months for two years, [which translates to] six weeks [of study] a year.
During the intensive weeks, I temporarily switched from business to academics and focused on my studies, and that helped a lot. I also participated in extracurricular activities like football, Friday night outs and so many more. I was the Director of Socials, and this gave me the opportunity to be very involved with many activities and to build friendships with my classmates that will certainly last a lifetime.
What did winning the MBA Entrepreneur of the Year award mean to you? Has it impacted your business?
Winning the MBA Entrepreneur of the Year means a lot to me – it was a keenly contested category, with some high-flying and impactful entrepreneurs, and I am so glad to have won such a competitive award.
Winning the award has made the staff at Nord happier, and I let them know that their dedication and hard work is a big factor in winning. It’s also why
our customers love our vehicles and after-sales service. The award has certainly opened some doors here for me and Nord in Nigeria. I believe after the world goes back to normal and we are able to resume travelling and normal business activities, I will be able to see the impact of the
award more.
What would your advice be to next year’s finalists of the MBA Entrepreneur of the Year award?
It is a prestigious award and getting nominated means you are doing really well in your country and your business.
Oluwatobi Ajayi is the Founder and CEO of Nord Automobiles – one of the first Nigerian automobile brands. Ajayi began his career at Mercedes-Benz Nigeria and started his entrepreneurial journey when he co-founded Jetvan, an authorised dealer of Mercedes-Benz at the age of 26 in 2015. In 2018, he was listed by Forbes as one of the most promising young entrepreneurs in Africa. Ajayi is an alumni of Lagos Business School, Pan-Atlantic University.
