This archive report was first published on 4 August 2020.
On August 4, 2020, Volkswagen marked a significant milestone in its African expansion with the launch of a vehicle assembly facility in Accra, Ghana. The facility, which has a capacity of 5,000 units per year, is a strategic move by the German automaker to capitalize on Ghana's growing automotive market.
The Accra facility will allow Volkswagen to assemble five models, including the Tiguan, Teramont, Passat, Polo, and the Amarok, through its licensed importer Universal Motor Limited. The company aims to unlock a capacity of 300,000 units annually, making it a significant player in the Ghanaian market.
Ghana's partial ban on imports of second-hand cars that are over ten years old has created a market gap that manufacturers like Nissan, Toyota, Suzuki, and Renault are eager to fill. Used cars make up 70% of Ghana's car imports, and Volkswagen is well-positioned to capitalize on this opportunity.
The new facility will expand Volkswagen's presence in Africa, adding to its existing assembly locations in South Africa, Kenya, Rwanda, and Nigeria. The company's commitment to Ghana is further solidified by its partnership with the country's Automotive Development Policy (GADP), an MoU signed with Germany in 2018 to establish an assembly plant.
“GADP has paved the way for Volkswagen to solidify its commitment in Ghana with the initial investment for the first phase of its long-term vehicle assembly plans. Volkswagen thereby is committed to helping Ghana to develop a modern automotive industry as part of the country's industrial transformation agenda,” reads a Volkswagen statement.
As part of its plans, Ghana will launch an Automobile Industry Development Support Centre, which will fast-track licensing of local vehicle assemblers and manufacturers. The centre will also set up vehicle financing schemes through the center, linking financial institutions with buyers interested in locally assembled vehicles.
President Nana Akufo-Addo said during the launch of Volkswagen Ghana, “The Centre will also co-ordinate the implementation of an essential element of a viable automotive sector, that is, the establishment of a Vehicle Financing Scheme, which will link financial institutions to individuals and groups interested in purchasing newly-assembled vehicles in Ghana. Furthermore, the Centre will carry out an Automotive Skills Enhancement Programme to provide requisite skills for the various categories of the value chain of the automobile industry.”
Ghana is working on positioning itself as West Africa's hub for manufacturing, leveraging the African Continental Free Trade Agreement (AfCFTA) to target the African market.
