‘Spare parts business is dying’ — Abossey Okai spare parts dealers

The nation’s biggest vehicle components sellers, Abossey Okai spare parts dealers say exorbitant port charges and government neglect has stymied the growth of their business.

They contended that vehicle components, locally referred to as ‘spare parts’ are what forms the core of the automobile; but will soon be non-existent in the country.

“Seven years ago 32 containers could be cleared in a year, now we can’t even clear five containers because of the 23 taxes imposed on the clearing of goods which includes levies, import duties and other charges at the ports,” Mr Takyi Addo,  Head of Communications, Abossey Okai Spare Parts Dealers Association, told the Graphic Business in an interview in Accra.

According to him, contributing to these high import charges is the hesitation of the government to charge spare parts dealers either a flat rate or a fixed rate at the ports.

“We have called for a fixed rate, the government says flat rate but we don’t want the flat rate, the flat rate varies, dependent on where the parts are being shipped from and the percentage-charge imposed on it by the authorities, but the fixed rate is fixed and a standard rate which is payable by all,” he explained.

Required rate

In March the leadership of the Abossey Okai Spare Parts Association said it viewed the proposal by some politicians to institute a fixed rate for the import of spare parts as a significant game-changer for the spare parts dealership industry in the country.

They asserted that the introduction of a fixed rate for spare parts importation, will be a crucial step in eliminating corruption at the ports and safeguarding the investments of its members.

The association further noted that a fixed rate, as opposed to a flat rate, will prevent the possibility of collusion among Customs officers at the port, ensuring a fair and transparent importation process.

Prior to this in January the association which claimed the majority of its members voted for the current government vowed to vote them out in 2024; they accused the government of introducing taxes that have negatively affected their business.

"Some two years ago, we were selling Toyota Vitz for GH¢35,000, but it is now selling for GH¢70,000, and the cost of spare parts has also shot up due to high import duties and the unstable exchange rates, and all we look forward to is voting this government out,"  a spare parts dealer told the Graphic Business.

No manufacturing plan

Mr Takyi Addo noted that added to the high port charges which have warranted the high cost of spare parts is the government’s failure to institute a mechanism that will engender the manufacturing of minor components such as bolts and ball joints in the country.

“We should be able to manufacture minor vehicle spare parts in the country but the government has not cushioned us, our inability to do that has made spare parts in the country more expensive,’ he stated.

He called for a moratorium by the government on taxes on vehicle components so that his outfit can join forces with other stakeholders in the automobile sector to set up a plant that will manufacture vehicle components in the country.

Local assembling plants

Mr Addo told the Graphic Business that local assembling plants in the country have not fully embraced spare part dealers in the country.

He also revealed that the assembling plants only existed in name and imported already assembled vehicles from overseas to just fix tyres underneath.

“The assembling plants we have here won’t need the spare parts dealers; they don’t need components or any vehicle parts, the vehicles are imported as complete automobiles with no tyres underneath, they are then transferred to the plants to fix the tyres, “he stated.

He wondered why the state had given tax exemptions to these local assembling plants and rather imposed taxes on spare parts dealers.

Abolishing import taxes

Mr Addo called on the government to abolish such taxes as the COVID Levy, import substitution levy and other needless taxes at the ports to grow the spare parts industry.

“COVID is over so why are we still paying a levy, Abossey Okai Spare Parts has over 45000 traders, who buy and sell all sorts of vehicle components, if we continue increasing the prices of our goods, commercial drivers will increase fares which will also affect the price of foods and make the cost of living very high,” he stated.

He charged the government to make vehicle components affordable to motorists and also to attract patronage and ultimately grow the economy.