Low purchases 'frustrating' domestic automakers - VW Group Managing Director

The Chairperson and Managing Director for Volkswagen (VW) Group South Africa, Martina Biene, lamented over the sluggish uptake of locally manufactured vehicles.

In 2023, a total of 6,000 locally manufactured or assembled cars were sold. Madam Biene, whose outfit operates the VW Assembly plant in Accra, explains that this situation is detrimental to the industry’s investment prospects.

According to her, the Volkswagen Group has already invested about US$54million in establishing its Semi Knocked Down (SKD) production plant in Accra-Tema, with an installed capacity to produce over 12,000 vehicles per annum. However, low demand for brand new cars could affect future investments if the government fails to efficiently implement some policy decisions.

On how to boost the adoption of domestically manufactured or assembled vehicles, she expressed hope that the government would restrict the importation of salvaged cars, a move endorsed by the industry.

She added that the Ghana Automotive Development Policy (GADP) is an outstanding document, but without enforcement of two key elements of the policy – the ban on second-hand cars and mortgage facilitation for credit purchases, the industry’s potential would be undermined.

“The promising progress of the automotive industry in Ghana is the envy of other African countries, especially in West Africa. However, Ghana is not fully harnessing the opportunities presented by GADP to grow into a thriving new car market,” said Biene.

“Only 6,000 new cars were sold in Ghana in 2023, which in my view, is not a true reflection of the potential of this country. I therefore hope that the Government of Ghana will soon do the right thing to implement the two outstanding elements to unlock the local market,” she added.

Madam Biene, who also serves as the President of AAAM, believes that the 2023 volume could be quadrupled in the short-term if the two outstanding elements of the GADP are implemented.

Regarding the significance of the local market to the VW Group, she stated that Ghana plays a crucial role in its African ambition to become the leading provider of sustainable mobility on the continent. This commitment is evident in Volkswagen’s position as the first carmaker to invest in the country following the introduction of the GADP.

She made these remarks at the media launch of the newly assembled Virtus Sedan car here in Accra.

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