German automaker, Volkswagen is preparing to offer an auto finance scheme in Ghana in order to pique the demand of the Ghanaian vehicle market for locally built vehicles.
The auto financing strategy will be put up in partnership with local banks, according to the business. This, among other things, will limit vehicle importation and the significant reliance on used vehicles.
Jeffrey Peprah, the company’s Chief Executive Officer, spoke to Citi Business News on Thursday at the ‘Showroom at Your Doorstep’ event in Accra.
“Imported cars are more expensive than we assemble here. We don’t pay import taxes on them so you already waive your import taxes. So that’s why the government is encouraging everyone to patronize locally assembled products. And we are looking at solutions like auto financing which is going to be a big key to drive the market. Very soon, we’ll see our banks finance people so that they can negotiate through auto financing so people can buy the local cars.”
Vehicle importation alone costs the country roughly US$1.5 billion each year.
The government and other industry actors have increased their attempts to eliminate this occurrence over time by implementing policies that make locally assembled cars more accessible to Ghanaians.
President Nana Akufo-Addo has previously stated that the government intends to implement a vehicle financing system to assist Ghanaians in purchasing brand new made-in-Ghana vehicles.
Volkswagen, one of the five car manufacturers with assembly plants in Ghana, hopes to launch an auto financing scheme that will make financial products available to allow customers to purchase locally produced automobiles without having to pay in full.
Professor Alex Dodoo, Director General of the Ghana Standards Authority, praised the quality of the cars built in Ghana at the same ceremony.
“When the automobile assembly process started, government did two things; establish and approve at cabinet level the Ghana Automotive Development Policy. Within that policy, the Ghana Standards Authority is mandated to be the regulatory authority for the safety of these vehicles. So we established a national technical committee to develop automotive standards in line with world class standards. And the standards we have are comparable to any available international standards.”
Volkswagen held an open day called “Showroom at Your Doorstep” to showcase the company’s technology that is being assembled in Ghana.
The Teramount, Passat, Tiguan, Polo Sedan, and the yet-to-be-released T-Cross were all on exhibit.