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Ghana's Automobile Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

  • ID: 5318510
  • Report
  • April 2021
  • Region: Ghana
  • 70 pages
  • Mordor Intelligence

FEATURED COMPANIES

  • Bajaj Motors
  • Ford Motor Company
  • Honda Motor Company, Ltd.
  • Kantaka Group
  • Mercedes-Benz
  • Tata Motors
Ghana’s Automobile Market is valued at USD 4 billion in 2020 and is expected to reach USD 11 billion by the year 2026 registering a CAGR of 15% during the forecast period (2020-2026).

By the outbreak of COVID-19, the automobile industry in Ghana faced considerable delays in 2020 due to supply chain disruptions in major automotive production hubs across the globe, leading to delays in the shipments of critical automotive components to carry out vehicle assembly operations.

About 70% of vehicles in Ghana are imported from different nations. The automotive sector in Ghana is generally comprised of retailers of imported pre-owned cars and wholesalers who deal in the retailing of new vehicles.

Ghana being the third biggest economy country among West African countries, is likely to experience growth in the automotive industry during the forecast period, owing to the increase in “Made in Ghana” vehicles, initiated by Kantaka Group since 2016, and increasing skilled-work force in Ghana automotive industry.

The imports on automotive parts and components is likely to increase in the country as the government has planned to reduce corporate tax to around 20-25% and remove Special Import Levy in the country under its manifesto in 2016.

Key Market Trends

Growing Automobile Industry

Ghana’s production industry receives proper aid from the local authorities, which has enabled it to emerge as one of the 40 quickest growing commercial productions globally. The industry currently accounts for a quarter of the country's GDP. But by 2021, it anticipates to account for at least 30% of the GDP, and the primary motive force for the increase might be the automobile industry.

The Government of Ghana, as part of its transformational agenda, has identified Vehicle Assembly and Automotive Components Manufacturing as a strategic anchor industry to be facilitated and supported as part of the Ten Point Plan for industrial development. As a result of this positive signal, Ghana is attracting investment in vehicle assembly from leading Original Equipment Manufacturers (OEMs) and investment partners, with positive projections of spill-overs into local manufacturing.

Ministry of Trade and Industry has developed a comprehensive package of incentives and policy measures to support the establishment of an automotive assembly and component manufacturing industry, as a strategic anchor of industrialization and a new pillar of growth in Ghana.

Both commercial and passenger vehicles are forecast to grow at a healthy rate in Ghana, because of the rising vehicle per population ratio. In 2020, 4,710 passenger vehicles in Ghana despite the global pandemic with a drop of 17% from sales from the previous year.

Domestic vehicle production and assembly have substantial multiplier effects for the economy and act as a catalyst for economic growth which in turn leads to an increasing purchasing power. The market has seen continuous positive growth, due to a boost in manufacturing, employment, industrialization, and export revenues.

To further sustain the diverse economic growth in Ghana, there is an increased need for transportation of goods and people, which is one of the key factors for the steady growth of the Ghana automotive market.

Increasing Passenger Car Demand

New passenger vehicle sales have shown an upward trend from 2,540 new vehicle registration in 2015 to 4,268 in 2018 although a spike in numbers was observed between 2011-2014 with an average of 6450 new vehicle registrations in these years.

Approximately 59% of the new vehicle market is made up of passenger vehicles as per the new vehicle registrations in 2017.

Amidst the growing GDP of the country and rising purchasing power, passenger vehicle sales are also driven by government purchases.

Second-hand import vehicles dominate the passenger vehicle segment. A large share of the used vehicles is imported from the United States, as the vehicle specifications in the United States are more in line with the taste and demand of the consumers in Ghana, which is not usually met by entry-level models from Europe. Ban on the importation of certain categories of automobiles (vehicles aged over 10 years and salvaged/accident vehicles) also drives the market towards increase in new car sales.

Due to low disposable income and very high cost associated with new vehicles, used vehicles dominate the Ghana’s automotive retail sector. These vehicles are mainly imported from regions having low resale or residual values of used vehicles like Europe, Japan, and the United States.

A common trend that can be seen is that a small percentage of new vehicles compete against a strong influx of much cheaper used imported vehicles. Vehicles tend to appreciate due to limited supply of vehicles and import duties.

The most popular imported brand is Toyota, which accounts for more than half of the imported vehicles. These are primarily imported from the United States and the Gulf States.

In the absence of affordable finance solutions, used vehicles remain the more attractive option for private vehicle buyers as second-hand passenger cars accounted for about 70% of the passenger vehicles sold in the country in 2017.

Competitive Landscape

The Ghana Automobile market is fairly consolidated and majorly dominated by few players like BMW, Daimler, Nissan, Ford, Volkswagen, Kantaka Group, and etc. Indian automobiles major Mahindra and Mahindra has invested heavily in the country and has made it a regional hub for the manufacture of its Sports Utility Vehicles.

However, the presence of other international automakers like Toyota, BMW, VW, and etc. with their high brand value, reliability, and trust, among the people in Ghana, is likely to provide strong competition for domestic manufacturers like Kantaka Group. Mahindra & Mahindra occupied nearly 20% of the imported vehicles in the country, with its popular vehicle model sales, like Genio, XUV, and Xylo. Buoyed by sales of 3,500 SUVs and pick-ups in the last seven years, Indian automotive major is ready to set up an assembly plant and service center in Ghana.

Brand-wise, this year the leader Nissan gained 1% market share, followed very closely by Toyota which gained 2.3% share. Mitsubishi (-22.6%) was in the third position and lost a 0.6% market share.

Reasons to Purchase this report:
  • The market estimate (ME) sheet in Excel format
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Note: Product cover images may vary from those shown

FEATURED COMPANIES

  • Bajaj Motors
  • Ford Motor Company
  • Honda Motor Company, Ltd.
  • Kantaka Group
  • Mercedes-Benz
  • Tata Motors
1 INTRODUCTION
1.1 Study Deliverables
1.2 Study Assumptions
1.3 Scope of the Study

2 RESEARCH METHODOLOGY

3 EXECUTIVE SUMMARY

4 MARKET DYNAMICS
4.1 Market Drivers
4.2 Market Restraints
4.3 Industry Attractiveness - Porter's Five Force Analysis
4.3.1 Threat of New Entrants
4.3.2 Bargaining Power of Buyers/Consumers
4.3.3 Bargaining Power of Suppliers
4.3.4 Threat of Substitute Products
4.3.5 Intensity of Competitive Rivalry

5 MARKET SEGMENTATION
5.1 By Vehicle Type
5.1.1 Motorcycles
5.1.2 Passenger Cars
5.1.3 Commercial Vehicles
5.2 By Component Type
5.2.1 Auto Ancillaries
5.2.2 Engine
5.2.3 Tyres

6 COMPETITIVE LANDSCAPE
6.1 Vendor Market Share
6.2 Company Profiles
6.2.1 Kantaka Group
6.2.2 Mahindra & Mahindra
6.2.3 Tata Motors
6.2.4 Bajaj Motors
6.2.5 Honda Motor Company, Ltd.
6.2.6 Ford Motor Company
6.2.7 Mercedes-Benz
6.2.8 BMW AG
6.2.9 Hyundai Motor Company
6.2.10 Nissan Motor Co., Ltd.,
6.2.11 Hero Group
6.2.12 Volkswagen Group
6.2.13 Volvo
6.2.14 Toyota Motor Corporation

7 MARKET OPPORTUNITIES AND FUTURE TRENDS
Note: Product cover images may vary from those shown
  • Kantaka Group
  • Mahindra & Mahindra
  • Tata Motors
  • Bajaj Motors
  • Honda Motor Company, Ltd.
  • Ford Motor Company
  • Mercedes-Benz
  • BMW AG
  • Hyundai Motor Company
  • Nissan Motor Co., Ltd.,
  • Hero Group
  • Volkswagen Group
  • Volvo
  • Toyota Motor Corporation
Note: Product cover images may vary from those shown

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