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xxxxxxxxxxx of Tuesday, 20 December 2016

Source: Graphic.com.gh

30% slash in prices of auto spare parts not in solidarity with NPP's victory - ASUAPAD

The Association of Used Auto Parts Dealers (ASUAPAD) has debunked claims that the reduction in the prices of vehicle spare parts on the market was in solidarity with the victory of the New Patriotic Party (NPP).

According to the Chairman of the Association of Used Auto Parts Dealers (ASUAPAD), Mr Sammy Siaw, the 30 per cent drop in prices of spare parts after the NPP’s victory was what he termed ‘an annual ritual’ that members of the association and dealers at Abossey Okai in particular normally use to attract customers during the Christmas festive season.

After realising that sale of auto spare parts are mostly bearish in the Christmas and New Year period, the Chairman of ASUAPAD explained that members of the association had decided to always drop their prices within the period in order to remain active during the one-month Yuletide period.

He further noted that the move is also aimed at redirecting traffic from least known areas where used auto parts are sold, to Abossey Okai, the heartbeat of such parts in the capital city.

“This reduction in prices during Christmas is something the media has not taken note of but in every December, we normally intentionally reduce prices of our goods just to catch the market,” Mr Siaw, who has been working at the Abossey Okai since 1982, told the GRAPHIC BUSINESS on December 14.

Contradiction

His explanation is at variance with recent media reports, which quoted some dealers of the parts saying that prices of their products had been reduced as a mark of celebration and solidarity with the election of Nana Akufo-Addo in the December 7 elections as the new president of Ghana.

But while admitting the reduction in prices, Mr Siaw said spare parts dealers at Abossey Okai had never reduced their prices in solidarity with any government in the country.

The drop in prices, he said was more of a Christmas gift to prospective customers and a marketing strategy than a mark of solidarity with any elected president or political party.

“When you go to Accra Central during Christmas and New Year, the place is normally choked but Abossey Okai is empty. So, our decision is just to drive traffic,” he explained.

Previous allegations

Citing events of 2001 to buttress his point, Mr Siaw explained that prices of automobile parts were reduced in that year due to a proliferation in the spare parts business.

“Our prices were reduced during the former President John Agyekum Kufour’s era because his government created a conducive business environment for small scale companies such as ours to thrive and this encouraged a lot of people to import in large quantities.”

“So, because of the availability of goods on the market, competition and prices went down automatically,” he added.

Future price reduction

The Chairman of ASUAPAD explained that buyers of automobile parts will only enjoy relief if the incoming government successfully tackled some key economic issues affecting spare parts dealers in the country.

He mentioned the tax stamps, three per cent flat Value Added Tax (VAT) and the Common External Tariff (CET) that is implemented across the ECOWAS subregion.

Beyond that Mr Siaw said the association would expect the incoming administration to help cut out the influx of foreigners into the retail market.

“Also, the poor performance of the cedi against major foreign currencies, coupled with the high interest rate, are some of the challenges affecting the survival of our business,” he said.

On the impact of the macroeconomic instability on businesses, Mr Siaw said high inflation, unstable exchange rate and power outages, explaining that such conditions made it difficult for businesses in the country to plan and grow.

Consequently, the chairman said majority of the spare parts dealers at Abossey Okai had diverted into other trades, leading to the closure of about 30 per cent of shops in the area.

Should the Nana Akufo-Addo government succeed in eliminating these challenges, Mr Siaw said businesses would not only be able to reduce their prices even further but would also create employment for the teeming youth.