Call for Financing Framework to Enhance Patronage of Locally Assembled Vehicles in Ghana

Mr. Jeffrey Oppong Peprah, CEO of Volkswagen Ghana, has called for a financing framework to boost sales of locally assembled vehicles. He pointed out the challenges posed by cash purchases and high interest rates, which limit access to new vehicles. Collaborative efforts among the government, banks, and insurance companies are essential to develop a loan system that would make vehicle purchases more affordable for Ghanaians, fostering economic growth and reducing the need for imported vehicles.

Mr. Jeffrey Oppong Peprah, the Chief Executive Officer of Volkswagen (VW) Ghana, has emphasized the importance of establishing a financing framework to enhance the patronage of locally assembled vehicles. He highlighted the current market dynamics, where cash purchases dominate, as a significant obstacle to facilitating widespread access to new vehicles in Ghana. Peprah made these comments during the launch of the new Volkswagen Touareg in Accra.

The newly unveiled Volkswagen Touareg is equipped with a powerful 3.0 TSI V6 engine that produces 250 kW, accompanied by an 8-speed automatic gearbox and 4motion all-wheel drive, ensuring superior performance. Its design features include advanced IQ.LIGHT HD matrix headlights, LED taillights with dynamic indicators, and a uniquely illuminated Volkswagen logo, tailored for the challenges of Ghana’s terrains.

Mr. Peprah urged for a shift away from the predominately cash-based purchasing model, stating, “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 noted that this prevailing trend, exacerbated by high interest rates exceeding 24 percent on traditional loans, severely limits the purchasing power of average Ghanaians, nudging them towards imported used vehicles.

The CEO divulged that the Automobile Association of Ghana is in active discussions with the government to develop a government-incentivized loan system for vehicle purchases. The goal of this initiative is to secure lower interest rates that would enable a larger segment of the population to afford new, locally assembled vehicles. Mr. Peprah remarked that the collaboration between the government and private sector, including banks and insurance companies, is vital to creating lower-cost options for prospective vehicle buyers.

Implementing such a financing facility would not only enhance buying power but would also invigorate the entire automotive value chain, creating jobs and stimulating economic growth. He remarked, “This will drive volume, and I think this will be something good for all Ghanaians who would like to drive a vehicle.” Moreover, he acknowledged that these initiatives are critical in reducing reliance on imported salvage vehicles, which raise safety and environmental concerns.

Mr. Peprah expressed his optimism that a unified effort among the government, financial institutions, and the private sector could pave the way for an effective vehicle financing framework. This collaborative approach could ultimately benefit both the Ghanaian economy and its citizens, making locally assembled vehicles more accessible to a broader audience.

In summary, Mr. Jeffrey Oppong Peprah advocates for a comprehensive financing framework to enhance the market for locally assembled vehicles in Ghana. He underscores the detrimental effects of the cash-based purchasing model, particularly amid high interest rates. The establishment of a government-incentivized loan system could lower purchase barriers, stimulate economic growth, and foster a safer automotive market by decreasing reliance on imported vehicles.

Original Source: gna.org.gh