AUTO PARTS BUSINESS IN GHANA

The spare parts business is a big business in the country. The demand for these products is high since vehicles wear out often and need periodic servicing. Secondly due the number of vehicles been imported into the country daily demand for spare parts has increased. This business contributes to the development of the country’s economy through job creation.
Although this business is a male dominated sector there are quite a number off females in this business. If you are a car enthusiast, then this business is for you. In Ghana though spare parts business can be found in the markets and around lorry and automobile stations, there are places known specifically for these products. In Accra the main location is Abossey okai and in Kumasi Suame magazine. I would like to concentrate on the Abossey okai spare parts for the purpose of this article.

HISTORY OF ABOSSEY OKAI
The Abossey okai spare parts market is a hub noted for both brand new and secondhand parts which started in the early 80s with only few traders but over the years the spare parts market at Abossey okai has become one of the busiest locations in the city. It is said to house over 30000 workers with replaces inclusive. It has businesses operating from table popular known as tabletop market, stalls, stores and multi-storey buildings.

TERMS USED IN THE ABOSSEY OKAI
Abossey Okai spare parts market like most business centers have certain jargons known to traders and some patrons. For instance the word “affairs boy” refers to middlemen or goro boys who normally act as facilitators between shop owners and buyers .They normally operate within the market without shops and often have connections with shop owners and approach prospective buyers who come to the market and lead them to the shops where they earn a little income from the sales. These affairs guys are very knowledgeable about the market and the parts hence have high marketing skills and operate these transactions as their full-time business. The common slogan at Abossey okai is “fa sika begye dade” which means come and exchange money for metals. Swap is also a popular word where goods are exchanged by shop owners thus if a buyer comes to a particular shop for goods and the product is not available the owner could go to another shop with the product and instead of giving money to the shop owner he intends give him another product mostly of the same model for instance O 20 can be exchanged with O 10

TYPES OF PARTS
There are two types of spare parts in Ghana; the brand-new parts and the secondhand parts. There are shops noted for either brand new or secondhand parts. The secondhand parts are cheaper and due to the economic situation, most people prefer it with some patrons having the belief the secondhand parts are of more quality.

The brand-new ones have warranty and no matter the quality of the secondhand parts the new ones may last longer. Secondly purchasing brand new parts also gives the buyer specifications to choose from. Also, most of the traders are noted for a brand of car (vehicle type) or parts of vehicle with varieties for their customers to choose from, for instance there are expert in cooling system, engines, suspension parts and braking system. There are also some noted for BMW cars, Honda parts etc.

CHALLENGES OF THE SPAREPARTS BUSINESS
The spare parts business like any other business has its own challenges;
1.The main challenge that affects their products is the high duty charges and since all the parts are imported it affects pricing and this eventually affects sales since most customers are not able to buy at higher cost.

2.The second issue affecting spare parts business is hikes in foreign exchange and due to the fluctuation of the cedi most traders have reduced the rate of importation which has affected pricing and sales.

3.Government regulations on importation of some of the parts also affects their business.

4.Competition from scrap dealers who buy these damaged parts and repair them and later sell to clients at cheaper prices also spoils their market.

5.Spare parts business must always have goods that are fast moving thus if brand is obsolete sales may be affected hence the business requires lots of capital.

SUPPLY
Spare parts are imported into the country from Korea, japan, china etc., though some of the traders purchase locally from these importers. However, most of the dealers travel to Lagos in Nigeria to purchase.

CLIENT
Most of their clients are car owners, mechanics and other spare parts dealers in different parts of the country.

STAFF
Due to the nature of the business it’s important to have a replacer. Usually most of the traders
operating from shops have their relatives mostly wives as assistants who help in management in their absence.

The spare parts business is very profitable with gross margin of 20% – 30% hence lucrative for
entrepreneurs to venture into. However, it’s necessary to have a good business plan which should include the brand of parts to sell, location and supplier before you commence since this would help identify the strength and weakness of the business.

It’s also important to understudy someone in similar business for at least 3 months before you start. Belonging to an association also helps in boosting sales in this kind of business. I also recommend online marketing/sales in this kind of business for a young entrepreneur which currently has little competition.