“Low Sales Frustrate Domestic Automakers,” Says VW Group Managing Director

Martina Biene, Chairperson and Managing Director for Volkswagen (VW) Group South Africa, has expressed concern over the slow sales of locally manufactured vehicles, citing challenges that could hinder future investments in the industry.

In 2023, only 6,000 locally manufactured or assembled cars were sold, a figure that falls below expectations. Biene, whose outfit operates the VW Assembly plant in Accra, emphasized the negative impact of low demand on the industry’s investment prospects.

Volkswagen Group has invested approximately US$54 million in establishing its Semi Knocked Down (SKD) production plant in Accra-Tema, with a capacity to produce over 12,000 vehicles annually.

However, the subdued demand for brand new cars could hamper future investments unless the government implements policy decisions efficiently.

To stimulate the adoption of domestically manufactured or assembled vehicles, Biene expressed hope that the government would restrict the importation of salvaged cars, a measure supported by the industry.

She emphasized the importance of enforcing key elements of the Ghana Automotive Development Policy (GADP), particularly the ban on second-hand cars and mortgage facilitation for credit purchases, to unlock the industry’s potential.

“The promising progress of the automotive industry in Ghana is the envy of other African countries, especially in West Africa. However, Ghana is not fully harnessing the opportunities presented by GADP to grow into a thriving new car market,” said Biene.

She urged the government to implement the outstanding elements of the GADP, emphasizing that their enforcement could quadruple the 2023 sales volume in the short term.

Highlighting Ghana’s significance to the VW Group’s African ambition, Biene noted that the country plays a crucial role in their vision to become the leading provider of sustainable mobility on the continent

Volkswagen’s investment in Ghana, following the introduction of the GADP, underscores their commitment to this goal.

Biene made these remarks at the media launch of the newly assembled Virtus Sedan car in Accra, reaffirming Volkswagen’s dedication to driving sustainable mobility and economic growth in Ghana.