New car assembly plant opens in Ghana

Japanese automaker Nissan has begun assembling cars from a new site in Ghana, making it the centre of automobile manufacturing in West Africa. Located in Tema on the outskirts of the capital Accra, the 5000 square meter state-of-the-art facility is capable of producing more than 31,000 vehicles per year. Although operating at a third of the capacity for now the plant is currently assembling the Navara pick-up truck, which is very popular in West Africa. Nissan has invested US$9m in setting up the factory. It hopes to advantage of the skilled workforce, tax benefits and the region’s fast-growing demand for reliable new vehicles.

The new plant will not only allow Nissan to try and acquire a greater market share in Ghana, it will also give it access to the rest of West Africa. The company is competing with Toyota and is currently estimated to have acquired 32% of the market share in Ghana. By producing more vehicles locally Nissan may even be able to replace the US$1.4bn used car market in Ghana. Used car imports dwarf the country’s domestic manufacturing, which produces only 6,550 vehicles per year. The new Nissan plant will almost double Ghana’s local manufacturing capacity.

The United States (US) International Trade Association (ITA) estimates that Ghana imports around 100,000 vehicles, around 90% of which are used vehicles from Japan, Europe, and the US.  

The Tema plant is owned and operated by Japan Motors Trading Company (Japan Motors) – one of Nissan’s two local distribution partners. The family-owned Japan Motors has been a major importer of Nissan vehicles for over 60 years and operated two Datsun/Nissan assembly lines in Ghana between 1965 and 1980.

Nissan has notably sought to integrate the new plant into its wider African operations. The Completely Knocked Down (CKD) kits assembled by the Tema plant are produced and shipped from Nissan Africa’s headquarters in South Africa’s Gauteng province. This means that the company could reap the benefits of the African Continental Free Trade Area (ACFTA). The inauguration of the new plant marks a significant milestone in the development of Nissan’s stronger continent-wide network of operations.

 

References

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'$9m Nissan assembly plant commissioned: over 31,000 vehicles to be produced annually', Japan Motors, 01 April 2022.

'Ghana: Sustainability of Automobile Industry Assured - President Akufo-Addo', Ghana Today, 01 April.

'Ghana - Country Commercial Guide', ITA, 24 March 2022.

‘Toyota launches Ghana's second auto assembly plant’, Reuters, 29 June 2021

'Nissan prepared for growing its Manufacturing Footprint in Africa: Ghana trainees prepare to graduate from a training programme in South Africa', Nissan Motor Corporation, 03 June 2021.

'Information brief for prospective vehicle assemblers under The Ghana Automotive Development Policy (GADP)', Ministry of Trade and Industry, August 2019,

'Nissan Coming to Build Assembly Plant in Ghana', African Eye Report, 06 November 2018.