Car prices rocket as import tariffs rise

Imports of cars and garage owners in parts of Accra and Tema say they are feeling the effect of the sharp depreciation of the cedi as it is impacting negatively on both the prices of imported cars and the duties charged at the ports.

They say, for instance, a car that should normally sell at GH? 14,000 is now selling between GH?18,000 and GH?C20,000 because of the high duties the cars attract.

A recent survey conducted by The Finder in garages at parts of Accra recorded stories of frustration and lamentation by the dealers of second-hand (home use) vehicle of high duties on the vehicles, low sales and increased costs.

One of importers, Mr. Alexander Benya, a dealer at Weija, told The Finder that he was paying a duty of GH?2,400 in 2008 for a Toyota Corola salon car, but was now paying as much as GH?5,400 on the same car.

“We are aware that the Customs officers at the country's port compute the duty charges with the prevailing dollar rate and that is what accounts for the constant rise in duties charged on our cars. Additionally, the cedi keeps losing its value in favour of the dollar, and therefore to our disadvantage and that of our customers,” Mr. Brenya stated.

He said, “Three years ago, the cedi was almost one-to-one with the dollar and the stability that came with it was business-friendly unlike now that we are doing. We are losing and there is no one to complain to,” he lamented.

According to some of them, the present state of affairs has dampened their appetite for any further investments and they have therefore decided to stop care sales.

Another dealer, Mr. Rex Oppong, also on the Mallam-Kasoa highway, could not hide his frustration as as he described how he had only two moths ago paid a duty of GH? 2,500 for a Nissan Sentra only to pay GH? 3, 500 for the same car in August.

“Only this month, I had to pay GH?3, 500 on each of the five Nissan Sentra vehicles, excluding other shipping and handling charges,” he lamented.

He also attributed the hike in import duty to the high dollar rate against the cedi, explaining that he was paying duty for the same cars in the neighborhood of GH?2,100 and GH? 2,500 when the cedi was GH? 1.7 to one dollar.

“When the cedi fell to GH? 1.8 to one dollar, I was paying GH?2,700 and GH?2,800 as duty and then now that the cedi is GH?2.0 to one dollar I'm paying as much as GH?C3,500,” Mr. Oppong said.

What was most worrying, according to him, was that customers insist on buying the cars at the old prices.

“The Nissan Sentra cars were going for GH?12,500 prior to the new import charges, but we had to review the price upwards to GH?15,500.

However, customers do not appreciate this and want the cars at the old prices,” he explained.

He found it ridiculous that the prices of the cars, prior to their arrival in Ghana, were low between 1000 dollar and 3,500 dollar, but the duties imposed on them in Ghana are almost double the amount.

Mr. Oppong said it was likely that he could be thrown out of business if the depreciation of the cedi and, therefore, the duty charges were not checked.

If his business collapsed, it would also affect the businesses of other players such as the mechanics, fitters and electricians who work on the vehicles before they are offered for sale, he said.

“These cars you see here did not come the way you are seeing them; the one who did the body works has been paid; the sprayer and electrician have also been paid, so if we are out of business, they are also likely to be affected.”

At Tema, an officer of a company that bids for and imports cars from the USA and Canada at the instance of customers told The Finder that the company incurred losses anytime the value of the cedi dropped.

“Before the cars arrive in Ghana, the value of the cedi may have dropped further, meaning then that we have to pay more duty, but we cannot surcharge the customer since the prices of the cars, including the then prevailing duty, had already been communicated to them,” he explained.