Traditionally, Ghana’s vehicle spare parts market is heavily concentrated within each regional capital. Most regional capitals in Ghana have hubs where spare parts are sold to different types of users. In the capital city, all roads lead to ‘Abossey Okai’ when in search of any type of auto part.
In Kumasi is the famous ‘Suame Magazine’ and in Tamale is the ‘Tamale Magazine’. Nevertheless, Abossey Okai in Accra and Suame Magazine in Kumasi are regarded as the main sales hubs for auto parts.
But with ‘everything’ retail moving online in recent times, online marketing and distribution of spare parts are gaining ground in Ghana. Active social media usage in Ghana’s retail space has propelled spare parts dealers to increasingly make use of social media and other online platforms to advertise and sell their products.
Though the online sale of spare parts is in its infancy, auto parts dealers and vehicle users are gradually becoming more inclined towards online purchases. These days, all types of auto parts can be ordered online, but car accessories and interiors have gained the most traction when it comes to online sales.
Surveying 20 dealers and 30 consumers from Accra and Kumasi, the following observations are made.
- Very high levels of awareness for online platforms: All the 30 consumers and dealers interviewed were aware of several social media and online platforms available to purchase and sell vehicle spare parts.
- Facebook is the main social media platform for online marketing of spare parts: 11 out of 30 consumers have used social media platforms to gain marketing and sales information about spare parts. Further, 16 out of the 20 dealers interviewed use social media to create visibility or to sell their products. The dominant social media platform used was Facebook (63%), followed by WhatsApp (25%) and other online media (12%). Aside from social media, some notable online platforms include but are not limited to AbosseyOkai Online, Exergy Mechatronics and Engineering, Maxtaco Auto Parts, and Auto Shack Ghana
- Most users use the online platforms to facilitate price comparison: though 11 out of 30 consumers use social media and other online platforms, only 2 of the 11 had made purchases through online interaction with the sellers/dealers. Most consumers use online platforms to facilitate price comparison and to ensure that they get a fair deal in the market.
- Online Purchases are mostly by Private Users: All 2 successful online purchases were done by private vehicle users. Such users appreciate the time convenience and ability to easily compare prices. They also believe that they get better quality as most online dealers are concerned about reputational damage if they sell bad-quality products. Commercial users mostly use online platforms to compare prices.
Is the Online Spare Parts Market here to stay?
Most likely, rising internet penetration in Ghana implies a simultaneous increase in social media and other online retailing activities. In January 2022, internet penetration was at 53% of the total population while social media usage was at 27.4% of the total population.[1]
Online retailing of vehicle spare parts will however take full effect if parties involved obtain value for the services rendered via these online platforms and can rely on the quality of products sold. According to online spare parts dealers, there was an upsurge in demand for auto parts via their online platforms during the COVID 19 pandemic indicating that online sales of spare parts will potentially increase as e-commerce becomes increasingly popular. Likewise, there are opportunities to build multi-functional e-commerce platforms and websites to facilitate online sales and purchase of auto parts within and across the country.
Market Size and Types of Vehicle Spare Parts Sold in Ghana
On average, about 100,000 vehicles (both old and new) are imported into the country each year to add to the stock of vehicles already on the road. There is a vibrant spare parts market to keep these cars in useful conditions. Presently, however, all vehicle spare parts in the Ghanaian market are imported. Approximately, GH¢ 150 million worth of vehicle spare parts are imported each year.
The chart below provides more information on the pattern of spare part imports between 2015 and 2021.
Types of Vehicle Spare Parts Imported into Ghana
In 2021, an estimated GH¢ 188.5 million worth of vehicle spare parts were imported into the country. Top imports, constituting more than 5% of total vehicle spare parts imports were: Parts and accessories of bodies (16.8%), suspension shock absorbers (10.1%), drive-axles with differentials (8.8%), brakes and servo-brakes (7.5%), road wheels and parts (5.9%), and radiators (5.4%). The figure below highlights more.
Outlook of the Spare Parts Market
Aside from the prospects for e-commerce, the structure of the vehicle spare parts market is set to change with vehicle assembling commencing in Ghana, especially if restrictive measures in the Ghana Automotive Development Policy (GADP) take effect. Restrictive measures in the policy include a ban on salvage and overaged vehicles, which will tilt the scale in favor of new car patronage, thereby changing the composition of vehicle types in the country. Historically, new vehicle imports constitute just about 10% of total vehicle imports, with overage vehicles constituting about 80% of total vehicle imports.
This implies that as the policy takes effect, there will be more new cars in the medium term, marginally reducing demand for some types of spare parts, especially parts needed to keep old vehicles in good condition. Demand for these types of parts will however stabilize in the long term.
Further, it is anticipated that vehicle component manufacturers will enter the market to provide support to the automotive sector as the sector grows. This will change the structure of the vehicle spare parts market from an import-driven market to a blend of imports and domestic production. Thus, deepening the value chain of vehicle manufacturing in Ghana.
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The Authors
| Anita is the
Head of Market Research and Trade Development Firmus Advisory Limited
|
| Laudina is a
Research Assitant Firmus Advisory Limited |
Kemp S. (2022). Digital 2022:Ghana. Datareportal. Available at: https://datareportal.com/reports/digital-2022-ghana
