Total Vehicle Sales Declined By 17% In 2020

Stanbic Bank research Stanbic Bank research has revealed that vehicle sales declined by 17.3% in 2020 compared to 2019 From the disruption in imports of vehicle parts to interruptions in large-scale production of vehicles, the coronavirus pandemic has had a swift and severe impact on the global integrated automotive industry.

In Ghana, a Stanbic Bank research has revealed 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 much procurement of saloon, pick-ups and sports utility vehicles (SUVs). “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 for 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 wages”.

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 a safe haven in the volatile West African sub-region. Ghana’s Automobile Market, valued at US$4billion in 2020, is expected to reach US$11billion by the year 2026 – registering a compound annual growth rate (CAGR) of 15% during the forecast period (2020-2026).

By virtue of the coronavirus outbreak, 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 shipment 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 generally comprises retailers of imported pre-owned cars (also known as Home Used Cars) and wholesalers who deal in retailing new vehicles.

Source: Thebftonline.com