The Vehicles and Assets Dealers Union of Ghana (VADUG) has expressed concern over what it describes as unfair competition from Chinese automobile companies and government policies that are threatening the survival of local vehicle dealers.

At a press briefing, the union said Ghanaian vehicle dealers are increasingly struggling to compete due to high import duties and taxes, while some foreign automobile assemblers benefit from tax exemptions under the country’s automotive policies.

According to VADUG, local importers of used vehicles from the United States, Europe and Japan pay between 35 and 50 percent in duties and taxes, whereas companies importing Semi Knocked Down (SKD) and Completely Knocked Down (CKD) vehicle kits enjoy significant duty concessions.

The union argued that the situation has created an uneven playing field, allowing some Chinese automobile brands to expand aggressively while local dealers continue to lose market share.

VADUG further raised concerns about what it believes could become an influx of internal combustion engine vehicles into Ghana as China moves toward phasing out petrol and diesel-powered vehicles by 2030.

The union warned that without strict regulation and quality control measures, Ghana risks becoming a destination for substandard vehicles, with potential implications for road safety and environmental protection.

To address the challenges, VADUG called on government to reform taxes and duties to ensure fair competition, enforce existing laws governing vehicle distribution and retail operations, and include the union in policy discussions relating to the automotive sector.

The union also appealed for stricter enforcement of vehicle quality and safety standards, as well as financial and technical support for local dealers through institutions such as the Ghana Export-Import Bank.

Beyond concerns about foreign competition, VADUG criticised the implementation of the AI Publican System used by customs authorities to assess imported goods.

According to the union, the system assigns mandatory minimum values to imported products, resulting in higher duty assessments that have significantly increased the cost of doing business for importers.

VADUG claimed that in some instances, import duties have doubled or tripled under the system, making it difficult for legitimate businesses to remain competitive.

The union argued that customs duties should be based on actual purchase invoices rather than computer-generated estimates and renewed calls for the introduction of a flat-rate duty system for vehicles and spare parts.

It said such a system would provide predictability for businesses, improve planning and reduce opportunities for corruption at the ports.

The union also called for a forensic audit into the issuance of DV trade plates by the Driver and Vehicle Licensing Authority (DVLA).

According to VADUG, while trade plates are intended for registered motor dealers and related businesses, thousands of plates appear to have been issued outside the recognised dealer network.

The union questioned the whereabouts of approximately 73,000 DV plates and called for greater transparency in their allocation and usage.

VADUG further urged government to revive plans for the proposed Car Village Market near Winneba Junction, a project intended to provide a centralised hub for vehicle dealers, customs operations and related services.

The union said the project, which was initiated under the previous administration, remains stalled despite repeated engagements with relevant authorities.

While reiterating its support for foreign investment, VADUG stressed that local businesses must not be disadvantaged by policies that undermine their competitiveness.

The union called for dialogue with government and industry stakeholders to develop solutions that protect jobs, support local enterprise and ensure the long-term sustainability of Ghana’s automotive sector.