An evaluation of the prospects and challenges of auto mechanic workshops in the informal sector in the Kumasi metropolis

Abstract

The study explored the prospects and challenges in the informal auto-mechanic sector focusing on auto-mechanics enterprises within the Kumasi Metropolis. Specifically, the study sought to examine the prospects of the auto-mechanic enterprises, examine the challenges facing auto-mechanic enterprises, and the preparedness of auto-mechanics to exploit the potential prospects to their advantage. By adopting the quantitative approach to research, the researcher administered a survey to a sample of 164 managers/owners of auto-mechanic enterprises within the Suame Magazine in the Kumasi Metropolis. Among the emerging prospects in the auto-mechanic industry as revealed in study were the growing number of automobiles in the country, the removal of taxes on imported spare parts, the establishment of the Suame Magazine Automatics Technical Institute, the advancement in automobile repair and maintenance technology, and the availability of cheap labour due to high unemployment in the country. Also, the major challenges faced by auto-mechanics included erratic supply of electricity to auto-mechanic workshops, high cost of electricity and fuel, high cost of spare parts due to depreciation of the Ghana Cedi against the US Dollar, limited sources of finance and high interest on bank loans, and lack of training on application of modern methods of automobile repair among others. Despite the numerous challenges that impeded the growth of auto-mechanic enterprises in the informal sector, it was deduced that the ability of auto-mechanics to take advantage of the emerging opportunities in the industry would inure to their benefit and lead to a significant improvement in their operations.