Business

Total car sales fell 17% in 2020 – Stanbic Bank Research

From the disruption in the importation of vehicle parts to interruptions in large-scale production of vehicles, the COVID-19 pandemic has had a swift and severe impact on the global integrated automotive industry.

In Ghana, a Stanbic Bank research has reported that vehicle sales declined by 17.3% in 2020 compared to 2019.

This decline, the report says, was mainly encountered in the sale of heavy-duty vehicles as the political campaign activities in the run-up to the general elections in 2020, saw a lot of procurement of saloon, pick-ups and sports utility vehicles (SUV).

“Although the sector was impacted, the effect was minimal in-country due to the positive impact during the political campaign period which showed an increase in vehicle purchase. The heavy-duty vehicles were however significantly impacted,” the report said.

The sale of vehicles is expected to pick up this year as the report expects a growth of 8.3%.

According to the report, “We expect a growth in sales of 8.3% due to the strong expected economic output over the same period and low base effects due to a forecasted strong decline in sales in 2020.

Also, the global share of the auto industry in the GDP structure is growing and growth dynamics will create new jobs and increase average wage.”

With major vehicle manufacturers expressing interest and making significant investments in opening and operating vehicle assembly plants in the country, the report suggests that Ghana has the potential to become a regional vehicle supplier for automakers as safe haven in the volatile West African sub-region.

Ghana’s Automobile Market valued at USD 4 billion in 2020, is expected to reach USD 11 billion by the year 2026 registering a compound annual growth rate (CAGR) of 15% during the forecast period (2020-2026).

By virtue of 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 (also known as Home Used Cars) and wholesalers who deal in the retailing of new vehicles.

Source: ClassFMonline.com

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