Ghana, West Africa’s second most populous country after Nigeria, has catalyzed growth in its automotive industry with a new investment policy now credited for driving the increase in the establishment of new vehicle assembling plants, with the potential to trigger high demand for vehicle paints and coatings solutions.

The number of international original equipment manufacturers (OEMs), local assemblers, and distributors has been on the increase in the last five years, driven largely by Ghana’s 2019 Automotive Development Policy (ADP), which has come with several incentives to woo private investors into the country’s fast-growing automotive market. The market is currently valued at more than US$4 billion.

This growth is expected to open more production and supply opportunities for paint and coatings companies, with the potential to expand the automotive industry’s demand for products that not only enable automotive industry players to compete on color and aesthetics but also the capacity to mitigate against metal corrosion.

The government-driven ADP, which is credited for driving the surge in investments in Ghana’s automotive industry, says a previous official statement “is to attract major OEMs to invest in vehicle assembly plants, rapidly increase production sales volumes to create the economies of scale needed to develop a fully integrated automotive industrial hub in Ghana – vehicle assembly and local manufacturing of components and parts.”

ADP targets companies with the potential to invest in assembling new passenger cars, SUVs and light commercial vehicles such as pick-ups, mini-buses and cargo vans that would ultimately drive up demand not only for a variety of OEM and refinish coatings but also for technology that reduces the adverse effects of these products on the environment.

Automotive Companies in Ghana

Automotive companies interested in Ghana’s vehicle market can now benefit from a corporate tax holiday for five to 10 years, 65% tariff differentiation for imported and local assembly, 0% import duties for plant, machinery, and equipment and value-based refunds.

Several global OEMs have in the last few years stepped up their investments in Ghana’s automotive industry, including Volkswagen, Toyota, Suzuki, Nissan, Peugeot, KIA, Hyundai, Changan, Foton, Kantanka, ZX Auto, Honda, Ashok Leyland, and Great Wall Motors.

Some of these OEMs are selling their vehicles directly to Ghanaian consumers while others have recently struck deals with local automotive companies for the distribution of their products at a time when there is growing awareness among consumers of the importance of environmental sustainability, hence the surge in demand and supply of electric cars as well as increasing use of eco-friendly interior, external and metal coatings.

The appetite to grow investments in vehicle assembling in Ghana is also being driven by the government policy to restrict importation of vehicles older than 10 years.