Mr. Salem Kalmoni, the Managing Director of Japan Motors has recommended a strong credit finance culture for Ghana’s budding automotive industry.
According to him, this is relevant because such fluid financial system ensures the easy and convenient purchases of new vehicles in the country.
With his company being one of the sole collaborators with Nissan Africa’s assembly plant in Ghana, he expressed his joy over the involvement of the Ministry of Trade and industry as well as government over the prospects of a working credit financial availability.
“It is extremely important, and it is actually a pillar for the successful production of locally assembled cars in Ghana. But this is not our purview, it’s the purview of banks. I’m however happy that the Ministry of Trade and Industry and the government are aware that this is very important and are working with the banks to make credit finance available.”
Explaining the stance of banks, Mr. Kalmoni posited that, banks should be more receptive to financing the purchase of new vehicles than second hand ones.
“One thing about the banks and credit finance is that when you extend credit, you want to extend it to new vehicles that don’t break down and have warranties. So this will be available for new vehicles only and the more it is available the more Ghanaians can afford to buy new cars instead of used ones”.
He further noted that with the growing number of assembly plants in the country with bustling prospects of assembling new cars to the country’s growing middle class, the financial sector will need to provide products that will make it easy to purchase such vehicles.
Elsewhere, the Managing Director of the Nissan Group of Africa, Shinkichi Izumi, expressed his optimism over the comprehensive implementation of Ghana’s Automotive Development Policy, which he believes will lead to a surge in demand for brand-new vehicles.
With a plant expected to be ready by the middle of next year, Nissan proudly boast of the latest Original Equipment Manufacturer (OEM) to launch the setting up of an assembly plant in the country.
Speaking in an interview, Mr. Shinkichi Izumi revealed that, provided the Automotive Policy is completely heeded to, it will translate to the migration of used 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 by locally produced models. And that is the direction we are working towards.”
The Government of Ghana, as part of its transformational agenda has identified Vehicle Assembly and Automotive Components Manufacturing as a strategic anchor industry to be facilitated and supported as part of the Ten Point Plan for industrial development. As a result of this positive signal, Ghana is attracting investment in vehicle assembly from leading Original Equipment Manufacturers (OEMs) and investment partners, with positive projections of spill-overs into local manufacturing.
To provide opportunities for higher value addition and highly skilled employment, the Ministry of Trade and Industry has developed a comprehensive package of incentives and policy measures to support the establishment of an automotive assembly and component manufacturing industry, as a strategic anchor of industrialization and a new pillar of growth in Ghana.
