Effect of Local Manufacturing Capacity on the Supply Chain Performance of Innoson Vehicle Manufacturing (IVM), Nnewi

The Nigerian automotive industry operates in a context of high import dependence, exchange rate volatility, and logistics bottlenecks, all of which undermine supply chain performance. This study examines the effect of Local Manufacturing Capacity (LMC) on the Supply Chain Performance (SCP) of Innoson Vehicle Manufacturing (IVM), Nnewi. LMC is operationalized through four proxies: Production Capability, Technology Utilization and Innovation, Local Sourcing of Inputs, and Skilled Workforce Availability; while SCP is measured by Delivery Efficiency (Supply Reliability), Cost Efficiency, and Availability of Critical Components and Materials. A survey research design was employed, using a census sampling technique to collect data from all 150 accessible employees via a structured five-point Likert-scale questionnaire. Data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) in SmartPLS 3. Findings revealed that technology utilization and innovation significantly enhances supply chain performance (β = 0.397, p = 0.046), while production capability (β = -0.179, p = 0.341), local sourcing of inputs (β = 0.178, p = 0.519), and skilled workforce availability (β = 0.585, p = 0.067) show non-significant effects. The model explained 92.9% of variance in supply chain performance (R² = 0.929). The study recommends that IVM prioritize digital technology adoption, enhance production flexibility, strengthen local supplier development, and expand workforce training to optimize supply chain resilience and efficiency in Nigeria’s automotive sector.