Partnership with second-hand dealers key to vibrant auto industry — GADA
Ghana Auto Distributors Association (GADA) says it is on course to strengthen its partnership with second hand auto dealers’ in the country to grow and nurture a vibrant auto industry.
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It maintained that the importers of vehicle components which is popularly referred to as ‘spare parts’ are key in cushioning local assembling of vehicles in the country.
GADA believed that such a partnership can stand the test of time when thriving local assembling plants are facilitated through a deliberate policy by the state.
The authorised vehicle distributors are therefore calling on government to implement the auto policy that will enhance an efficient assembling hub in the country and create a component manufacturing sector.
“Most of the Association of Automobile Assemblers of Ghana (AAAG) and the Ghana Automobile Development Centre (GADC) have agreed not to push away or destroy the business of second hand car dealers, because they will play an integral part in the value chain when local assembling becomes vibrant in the country,” Mr Francis Larbi-Odame, the Executive Secretary of GADA told the Graphic Business in an interview in Accra last Thursday.
Customs Amendment Bill
In 2020, the government announced plans to prohibit the importation of used vehicles older than 10 years and to impose a complete ban on salvaged cars, commonly known as ‘accident cars’, pending the full passage of the Customs Amendment Bill.
Subsequently the Automobile Dealers Union of Ghana (ADUG) threatened to embark on a demonstration against government if it does not agree to amend aspects of the Customs (Amendment) Act, 2020, which bans the importation of second hand cars of more than 10 years old, and salvage cars, locally referred to as ‘accident cars’.
Consequently Information Minister Kojo Oppong Nkrumah told the media that the government has plans to make second hand car dealers distributors of locally assembled vehicles in the country.
“We have an opportunity to explore ways of onboarding them to become the new dealers of these locally assembled vehicles, so in the end we are able to develop a local industry for cars manufactured in Ghana, create jobs, create incomes and bring more safety to our roads,” he stated.
Challenges
Mr Odame noted, however, that hurdles remain for the local assemblers to surmount. He mentioned the financing as a major challenge for the local assemblers.
“The exchange rate is not our best ally at all, financing of new vehicles by customers have become a major challenge, GADA doesn’t want to be involved with how a customer finances the purchase of vehicles, we are only interested in distribution, however, the banks are not so willing to take the bill of a customer who wants to buy on hire purchase or credit,” he stated.
He also lamented the importation of vehicles by unregistered and unathorised individuals and agents into the country.
“Another major challenge we are facing is the grey importers, the unregistered and unauthorised individuals and agencies who import new cars into the country and sell,” he stated.
Future of auto industry
Mr Odame revealed that the future of the auto industry looks bright if key challenges such as financing and grey importation is forestalled.
“RANA Motors plant at Amasaman at produce 32000 vehicles at full capacity, if it gets the needed support that will help and support the industry, grow jobs and create a sustainable industry which can help the growth of the economy,’ he added.
