Volkswagen has opened a vehicle assembly in Accra, installing a capacity of 5,000 units per year. The Accra facility will allow the company to boost local manufacturing following Ghana’s partial ban on importation of used cars.
Volkswagen will assemble five models, including the Tiguan, Teramont, Passat, Polo, and the Amarok through its licensed importer Universal Motor Limited, looking to unlock a capacity of 300,00 units annually.
In May, Ghana instituted a ban on imports of second-hand cars that are over ten years old. As a result, the country attracted the attention of manufacturers like Nissan, Toyota, Suzuki, and Renault, looking to fill the market gap. Used cars make up 70% of Ghana’s car imports.
The new facility will expand the Volkswagen’s presence in Africa, adding to other assembly locations in South Africa, Kenya, Rwanda, and Nigeria.
The Volkswagen Ghana subsidiary rides on Ghana’s Automotive Development Policy (GADP), an MoU with Germany signed 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.
Further, the country plans to launch an Automobile Industry Development Support Centre, which will fastrack licensing of local vehicle assemblers and manufacturers. Ghana will also set up vehicle financing schemes through the center, linking financial institutions with buyers interested in locally assembled vehicles.
“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,” President Nana Akufo-Addo said during the launch of Volkswagen Ghana.
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.