Effective credit system needed to support Ghana’s automotive industry – Japan Motors MD

The Managing Director of Japan Motors says a strong credit finance culture is needed to support Ghana’s young automotive industry.

Salem Kalmoni, whose company is the sole partner to Nissan Africa’s assembly plant in Ghana, noted that as more companies set up assembly plants to manufacture and sell 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.

The purchasing of cars in Ghana be it brand new or second hand, is normally done through the use of high-interest car loans from financial institutions or through lump-sum payments.

Speaking to Citi Business News, Mr. Kalmoni said the importance of an effective credit finance regime that makes the acquisition of new vehicles easy cannot be understated.

“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.”

“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 added.

We’re ready to meet increase in demand for new cars – Nissan Africa MD

Managing Director of the Nissan Group of Africa, Shinkichi Izumi, says he’s confident the full implementation of Ghana’s Automotive Development Policy will lead to a surge in demand for brand-new vehicles, a development which carmakers with assembly plants in the country will welcome.

The Automotive Development policy is a comprehensive package of incentives and measures to support the establishment of an automotive assembly and component manufacturing industry in Ghana.

Nissan last week became the newest Original Equipment Manufacturer (OEM) to launch the setting up of an assembly plant in the country, a plant which is expected to be ready by the middle of next year.

In an interview with Citi Business News, Mr. Shinkichi Izumi said if all things go well, the ratio of 1 new car to 9 used cars in Ghana will begin to change in favour of new 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.”

Japan Motors launches Nissan assembly plant in Ghana

As part of efforts to develop Ghana’s automotive industry to serve both local and the African market, Japan Motors has set up a Nissan assembly plant in the country.

According to stakeholders in the industry, the plant will promote skills development and job creation in Ghana.

The Managing Director of Japan Motors, Salem Kalmoni, at the launch of the project, promised to donate the first assembled Nissan pick-up to the Kwame Nkrumah University of Science and Technology, to support technical education.

“To show our commitment to cooperate and support technical education, and given this auspicious occasion, I am pleased to announce that Japan Motors and Nissan will be donating the first assembled Nissan pick-up to the premier Science and Technology University in Ghana, KNUST. We would like to congratulate them on being recently ranked as first university in Ghana and 12th in Africa. We will be donating this pick-up to their Mechanical Engineering department with the proviso that the vehicle be used for learning and training purposes only, and not as transport,” he announced.

The Trade Minister, Alan Kyerematen, says government is set to develop industrial enclaves which will boost manufacturing for the industry.

“You cannot dictate to investors where they site their facilities in this industry, but we know that the global practice has been that government also provides industrial lands, industrial space, and enclaves that allow manufacturers and investors to cluster so that they can reinforce each other’s production of vehicles and parts.”

He continued, “And so as part of this framework, we are going to develop a major industrial enclave for automotive manufacturing and then also for component manufacturing.”

The General Manager in charge of Sales and Marketing at Japan Motors, Amine Kabarra, spoke about how the pricing of the cars would be determined.

“In terms of pricing, I think obviously, it would be impacted by the general automotive policy that the government is intending to implement so all new cars that will be imported directly from other factories around the world will be treated with high duty else those who are imported to be built locally here will have a lot of reductions and even zero taxes on them.”