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Money in the Dirt: Are Ghana’s mechanics secret millionaires?

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Money in the Dirt: Are Ghana’s mechanics secret millionaires?

At least 80 percent of Ghanaian car owners I’ve surveyed did not buy brand new cars. They bought used-cars from Europe, America or elsewhere across the globe. These fairly used or slightly used cars come into the country, normally through Ghana’s main sea ports – Tema and Takoradi harbors.

One disadvantage of these home-used cars, (the usual name for imported used-cars) is that they often break down or develop faults that require visiting the workshop. After your first visit, you are likely to go there every three months to fix one thing or another.

A situation that has kept vehicle spare parts hubs like Abbosey Okai, Kokompe in vibrant multimillion dollar business.

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In this mess, it is only the mechanics who are smiling. They are the only ones making money in the process, whilst all others part with funds and experience an unnerving discomfort. The hands on experience and skill of mechanics are those highly sought after by many vehicle owners.

Commercial vehicles visit a mechanic’s workshop more often. A visit to mechanic’s workshop in Accra will show you the number of clients they work with on daily basis, their cost of operation and the large mark-ups on replacement parts they buy for clients.

How the Business is Organized

A mechanic will usually not give you an invoice until after diagnosis, like most other service providers. However, they may as well not stick to agreed charges for their services.

Your bill may keep soaring each day as they shift faults from one part of the car to another. Almost like an experiment, they pile huge financial burden on customers at mostly no cost to their business. On average, mechanics earn GHc50 per car attended and would usually service about 10 cars before the day ends.

They have very low operating expenses; feeding, rent, transportation to and from major spare parts markets, and wages for their apprentices and few workers.

All other direct cost of servicing or fixing a vehicle at the workshop is billed to the customer. The point here is that, a medium-sized mechanics’ business is capable of easily averaging GHc250 a day throughout their six day working week in profits.

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Why are they not rich

Most mechanics we know since childhood have not advanced economically. They still operate from their small corner yards in the neighborhood, without any improvements to processes, customer service, billings, technical capabilities, strategies to increase market share etc.

Most car owners cannot afford to take their faulty cars to major dealerships in Accra for maintenance and repairs – about 80% of car owners – and as such have to turn to these poorly organized medium and small scale workshops.

Mechanics have not taken full advantage of this large business. They are unprofessional in most of their dealings with customers and sometimes extend it to their staff.

Bloated invoices that keep changing all the time, service timelines that are not met, shoddy works, frivolous relationships with customers, low usage of technology in diagnosis and testing, poor or lack of marketing strategies, complacency, are among some of the issues hampering their businesses.

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Most mechanics are able to keep a customer for only about three years, but surprisingly do not care to find out why customers leave after these years.

The Stars

Some mechanic workshops are reorganizing their businesses and giving it some professional touch. They are employing accountants and salesmen. They are paying all utility bills and taxes. They are employing security measures at their workshops are making customers feel at ease.

Such professional practices have led them into contracts and arrangements with corporate clients to carry out routine maintenance and repairs for their fleet and even with insurance companies to fix cars of policy holders that got involved in accidents.

The point here is that, there is a big business out there for the vehicle repairs and maintenance industry. One which has not seen proper and well-organized corporate presence.

From supply of car parts, training of mechanics, application of technology, improvements and installations, to sale of cars and insurance.

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The industry is big and even though entrepreneurs in the industry may not automatically become millionaires, there is a great opportunity to make decent and market-beating earnings in blue collars.

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