Managing Director of the Nissan Group of Africa, Shinkichi Izumi, says he’s confident the full implementation of Ghana’s Automotive Development Policy will lead to a surge in demand for brand-new vehicles, a development which carmakers with assembling plants in the country will welcome.
The Automotive Development policy is a comprehensive package of incentives and measures to support the establishment of an automotive assembly and component manufacturing industry in Ghana.
Nissan last week became the newest Original Equipment Manufacturer (OEM) to launch an assembly plant in the country, a plant which is expected to be ready by the middle of next year.
In an interview with Citi Business News, Mr. Shinkichi Izumi said if all things go well, the ratio of one new car to 9 used cars in Ghana will begin to change in favour of new cars.
In general we are looking at the new cars to used cars ratio in Ghana which is 1:9 currently. But we see that with the effective implementation of the Automotive Policy there will be a migration from used cars especially ones that are older than 10 years, to new cars. The increased demand is going to be satisfied with locally produced models. And that is the direction we are working towards.”
Japan Motors launches Nissan assembling plant in Ghana
As part of efforts to develop Ghana’s automotive industry to serve both local and the African market, Japan Motors has set up a Nissan assembly plant in the country.
According to stakeholders in the industry, the plant will promote skills development and job creation in Ghana.
The Managing Director of Japan Motors, Salem Kalmoni, at the launch of the project, promised to donate the first assembled Nissan pick-up to the Kwame Nkrumah University of Science and Technology, to support technical education.
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To show our commitment to cooperate and support technical education, and given this auspicious occasion, I am pleased to announce that Japan Motors and Nissan will be donating the first assembled Nissan pick-up to the premier Science and Technology University in Ghana, KNUST. We would like to congratulate them on being recently ranked as first university in Ghana and 12th in Africa. We will be donating this pick-up to their Mechanical Engineering department with the proviso that the vehicle be used for learning and training purposes only, and not as transport,” he announced.
The Trade Minister, Alan Kyerematen, says government is set to develop industrial enclaves which will boost manufacturing for the industry.
“You cannot dictate to investors where they site their facilities in this industry, but we know that the global practice has been that government also provides industrial lands, industrial space, and enclaves that allow manufacturers and investors to cluster so that they can reinforce each other’s production of vehicles and parts.”
He continued, “And so as part of this framework, we are going to develop a major industrial enclave for automotive manufacturing and then also for component manufacturing.”
The General Manager in charge of Sales and Marketing at Japan Motors, Amine Kabarra, spoke about how the pricing of the cars would be determined.
In terms of pricing, I think obviously, it would be impacted by the general automotive policy that the government is intending to implement so all new cars that will be imported directly from other factories around the world will be treated with high duty else those who are imported to be built locally here will have a lot of reductions and even zero taxes on them.”
The Automotive Industry
In March this year, government made a strong case for the passage of a law that will formally lay the platform for Ghana’s automotive industry.
This was done through an amendment to the Customs Act, 2015 (Act 891), which provides some incentives to Ghanaian car manufacturers through the Ghana Automotive Industry Policy. It also places a ban on salvage cars and second-hand cars of not more than ten years old.
According to government, the move is aimed at making Ghana the hub for Automotive Industry in the West African sub-region.
Already, Toyota and Suzuki have formally committed to set up car assembling plants in Ghana. This was after Nissan and Sinotruk also expressed an interest in Ghana, with Volkswagen already launching some locally made cars.
Currently, Ghana has three assembling plants, Volkswagen, Kantanka and the latest project by Japan Motors to assemble Nissan vehicles.
Ghana had earlier signed a Memorandum of Understanding with Nissan Group of Africa for the establishment of automotive manufacturing industry in Ghana, which will make Ghana the hub for sales and marketing of Nissan in West Africa.
President Akufo-Addo, after the signing of the MoU, said the vehicle assembly plant will become operational in 2019. But the project was finally launched on Wednesday, November 18, 2020.
The new Nissan assembling plant, which will be commissioned in the third quarter of 2021, will act as a catalyst for further industrialization and employment creation.