Call for Financing Framework to Enhance Local Vehicle Assembly in Ghana

Mr. Jeffrey Oppong Peprah, CEO of Volkswagen Ghana, advocates for a financing framework to boost the purchase of locally assembled vehicles, addressing the current cash-dominant market that restricts access. He outlines how high-interest loans push consumers to buy used imports. Peprah emphasizes collaboration between government, banks, and the private sector to create affordable financing options, ultimately promoting economic growth and reducing reliance on hazardous imported vehicles.

Mr. Jeffrey Oppong Peprah, CEO of Volkswagen (VW) Ghana, has called for a financial framework to enhance the patronage of locally assembled vehicles. He emphasized that the current market dynamics, dominated by cash transactions, hinder access to new vehicles. His remarks were made during the introduction of the new Volkswagen Touareg in Accra, which features advanced technology and performance capabilities suitable for Ghanaian terrain.

The Volkswagen Touareg is equipped with a robust 3.0 TSI V6 engine, delivering 250 kW of power, combined with an 8-speed automatic gearbox and 4motion all-wheel drive. Additionally, it showcases innovative IQ.LIGHT HD matrix headlights and LED taillights, enhancing its functionality and aesthetic appeal.

Mr. Peprah pointed out the pressing need to transition from a cash-based system, noting, “We see that all vehicles being purchased in Ghana or in the sub-region are mostly cash paid. People save for a longer time and then pay for the vehicle in the longer term.” He stressed that this change would improve vehicle ownership accessibility for many Ghanaians.

Currently, high-interest rates on traditional loans have exceeded 24 percent, which severely limits the average Ghanaian’s purchasing power, often leading them to opt for imported used vehicles instead. To counter this trend, the Automobile Association of Ghana is in discussions with the government to establish a government-incentivized loan system aimed at providing lower interest rates.

Mr. Peprah indicated the necessity for collaboration among the government, private sector, banks, and insurance companies to create a more affordable vehicle purchasing system. He believes such a financing structure will incentivize vehicle purchases, stimulating the entire automotive value chain, promoting job creation, and fostering economic growth.

The CEO also stressed that reducing reliance on imported salvage vehicles, which pose safety and environmental risks, is essential. By making locally assembled vehicles more accessible, the market for hazardous imports would diminish, fostering a safer automotive landscape.

Mr. Peprah expressed optimism that a joint initiative between the government, financial institutions, and the private sector can lead to a sustainable vehicle financing framework, ultimately benefiting the Ghanaian economy and its citizens.

In summary, Mr. Jeffrey Oppong Peprah advocates for a comprehensive financing framework to facilitate the purchase of locally assembled vehicles in Ghana. By overcoming the limitations posed by cash transactions and high-interest rates, this initiative aims to improve vehicle accessibility, create jobs, and enhance economic growth while reducing reliance on unsafe imported vehicles. Collaborative efforts among various stakeholders are crucial for implementing this change effectively.

Original Source: gna.org.gh