Toyota’s Ghana assembly plant takes off, targets Nigeria, other markets

Leading global automaker, Toyota Motor Corporation, has set up an assembly plant in Ghana with an annual capacity of 1,330 units, the bulk of which they plan to sell to the big Nigerian market and other West African countries.

The inauguration of the assembly plant was performed on Tuesday by Ghanaian President, Nana Akufo-Addo, who expressed excitement at the second major automaker coming to establish factories in the country in the last one year.

Akuffo-Addo said at the ceremony, which took place at Toyota Tsusho Manufacturing Company Limited at Freezones Enclave, Tema, that Ghana aimed to boost its auto sector and attract automakers with generous fiscal incentives to assemble and produce cars in the country.

He said, “The use of foreign exchange to import cars in Ghana will be reduced, at the same time, the export of made in Ghana cars to other African markets will earn our nation much needed foreign exchange.”

According to Reuters, the Toyota-Ghana assembly unit, a $7 million investment with annual production capacity of around 1,330 units, followed the launch by Volkswagen of a 5,000 unit per year capacity assembly facility in August 2020.

The plants are the result of global automakers such as VW, Nissan, Toyota, Honda and Peugeot waking up to the potential of the African market, traditionally dominated by used-car sales.

Ironically, while Ghana is celebrating the opening of new vehicle assembly plants, Nigerian auto assemblers are lamenting lack of patronage, influx of imported used vehicles and high cost of doing business crippling their operation as well as sending many out of business.

Toyota Nigeria Limited had some two years ago celebrated the assembling of few units of Toyota Hiase from its Lagos assembly plant but nothing has been heard about the factory since then.

Nigeria has an annual demand of about 1.5 million vehicles, out of which about one million are being imported, the bulk of which are used or Tokunbo.

According to an International Trade Administration’s report, the production of vehicles in Nigeria declined from 350,000 in 2017 to 150,000 in 2020.

President and Chief Executive Officer of Toyota Tsusho Corporation, Ichiro Kashitani, had announced in 2019 that the company would start assembling its vehicles in Ghana from August 2020.

This announcement was made at the 7th Tokyo International Conference on African Development (TICAD 7), in Japan, where President Muhamadu Buhari had, in a meeting with Kshitani, asked Toyota to establish a plant in Nigeria.

Ghanaian President Akufo-Addo had said the signing of the MoU with Toyota Tsusho was in line with the vision of making Ghana an automotive hub for West Africa and the larger African market.

He said Ghana was the base to reach the larger African market with the coming into force of the African Continental Free Trade Area (AfCFTA).

Speaking further at the Toyota plant inauguration, Akufo-Addo said he was pleased that the plant had become a reality despite claims by some persons that it was only a hoax “which will never see the light of day”.

He said, “Government attaches great importance to the development of the automobile industry in Ghana.”

Ghana Minister for Trade and industry, Alan Kyerematen, also said at the event that the establishment of the plant in the country was a step towards the local manufacturing of cars in Ghana.

“In Africa, we import millions of dollars of cars. I’m very confident that with what we’re doing here, very soon, we will see made-in-Ghana cars all around Africa. The industry will create highly skilled jobs and promote training opportunities for the youth of our country. It will also have multiplying effect by stimulating the growth of other sectors of our economy,” Kyerematen said.