September 25, 2020

Garage operators unhappy with implementation of ban on salvaged cars

Garage operators in the country are calling on government to scrap implementing the ban on salvaged cars in October 2020.

They argue that, should government go ahead with the implementation, they will lose their livelihoods.

Parliament passed the Customs (Amendment) Bill, 2020 that bans the importation of accident and salvaged motor vehicles into the country.

The act amends the Customs Act, 2015 (Act 891). The banned vehicles comprise wrecked, destroyed or physically damaged by collision, fire, water or other occurrences as well as specified motor vehicles that are over 10 years old.

The law, which will come into force in October 2020, was however opposed by the Minority and vehicle dealers across the country but President Akufo-Addo assented to the Act on April 30, 2020.

Currently, it seems majority of cars driven on Ghana’s highways are mostly salvaged cars imported at cheap costs.

Data available from the Ghana Revenue Authority (GRA) Customs Division indicates that between 2005 and 2016, more than one million vehicles were imported into the country; representing an average of 100,000 cars per year.

Out of this figure, 80 percent were second-hand vehicles.

Currently, there are penalties for over-aged cars ranging between 5 and 100% of the total cost, insurance and freight of an imported car between 10 years, and those over 35 years at the country’s ports.

But with the growing demand for salvaged cars, it seems there will be an increase in sales for players in the automobile and garage industries.

Interacting with various mechanics, sprayers and other industry players who work on these salvaged cars before they are outdoored at the various garages, it seems this is their major source of income.

This is because cars in better shape do not fetch them as much as these salvage cars.

Isaac Nartey is an auto mechanic at the AutoVec fitting shop in Accra. He explains to me some of the activities he undertakes on salvage cars when they are brought to his garage.

“When I get a salvaged car, depending on the fault it either cost moderate or cost goes up. Maybe the problem has to do with burnt shocks, with that we only have to remove the burnt shocks and buy new ones to replace it. Such problems actually come frequently. In a week I can get about seven of such cars to work on,” he stated.

Mr Emmanuel Addo is also a mechanic who has been in this business for over 25 years.

He is also not in favour of the government’s decision to ban salvage cars.

From all indications, the salvaged car business is a very lucrative one and the players reveal to me how much they earn in a week.

Scott Yeboah a sprayer says “We are able to work on about five or six salvaged cars in a week. We have a lot of customers who bring us these cars.  We charge Ghc1,500 for spraying a small car. We sometimes reduce it to Ghc1,200. We can also charge Ghc500 for just spraying portions of it depending on the workload involved. For the bigger cars, we can charge up to Ghc3,500”.

Wofa Atta ,also a Welder also backed his point saying “I recently charged an amount of ghc200 for fixing a Toyota Yaris. I only changed the bumper and headlights and we bought those parts from Abbosey Okai.”

As part of its transformational agenda, the government identified Vehicle Assembly and Automotive Components Manufacturing as a strategic anchor industry that will promote economic development in the country and provide incentives for auto manufacturers.

The government launched the Ghana Automotive Development Policy in August 2019 to promote the manufacture of automobiles for both the domestic market and the West African sub-region.

The amendment is part of a bigger plan towards the implementation of the Ghana Automotive Manufacturing Programme, which has so far attracted several global car assembly plants into the country.

The Automobile Dealers Union of Ghana (ADUG) had also called on government to hold broader consultations with all stakeholders in the automobile industry before the ban is implemented.

The sector players feel left out as they argue that government could have consulted them before taking what they believe is a hasty decision. They are unhappy with this and are hoping government considered a reversal of the bill to protect their business.

They tell Citi Business News “ We plead with government to rescind its decision because that is our major source of livelihood. That is what we do to take care of our families.”




Source: Business