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Used cars, certified aftermarket parts seen as opportunities in Ghana

Tuesday, March 7, 2017 - 09:00
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Golden opportunities

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A former British colony known as the Gold Coast, located on the Gulf of Guinea, Ghana was the first primarily black nation in sub-Saharan Africa to gain independence from colonial rule in 1957. (A UK-influenced version of English is the official language.) And life can be hard in Ghana, which has a history of droughts, floods, civic unrest and other calamities such as a rampant AIDS epidemic. The average life expectancy hovers at 66 years, compared to 78 years-plus in the U.S. (Japan has the world’s highest life expectancy at nearly 84 years.)

Ghana’s consumer prices are on-average 19.3 lower than those found in America, yet analysts at the U.S. Department of Commerce’s International Trade Administration (ITA) report that a burgeoning middle class presents investment possibilities for the automotive sector.

Despite Ghana’s British background, vehicles there are left-hand drive, “opening up significant export opportunities for U.S.-manufactured passenger and commercial vehicles,” according to the ITA. Reliable and relatively frequent shipping routes between U.S. East Coast ports and Ghana is another positive factor, as is demand for a wide range of specialty vehicles including mining and construction equipment, trucks outfitted for working on the growth-oriented electrical grid, garbage trucks and other infrastructural and industrial applications.

“Like much of Africa, the Ghana market is highly price sensitive. Buyers, both private consumers and industrial users, are likely to see greater value in used or reconditioned equipment than newly manufactured, more expensive, products. In recent years used passenger vehicles has been the largest category of goods exported from the U.S. to Ghana,” the ITA says. “A number of Ghanaian buyers have traveled to the United States in recent years to purchase used vehicles from U.S. auto auction companies.”

A general trend cited by the ITA is a shift toward vehicles with a smaller engine capacity; five-door cars are generally preferred over three-door cars. And although smaller in size, within Ghana’s new vehicle market American-made sedans and SUVs are becoming increasing popular because “it is easier to obtain replacement parts than was previously the case.”

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