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Minister Chinamasa

Business Reporter
The Industrial Development Corporations plans to take advantage of measures pronounced in the mid-term fiscal policy to revive its financially distressed vehicle assembly units.
Presenting his mid-term fiscal policy Finance Minister Patrick Chinamasa raised import duty on some vehicles in what should boost local vehicle assemblers and downstream industries.

IDC public relations advisor Mr Derek Sibanda said the policy measures augur well with IDC’s efforts to turnaround Willowvale Mazda Motor Industries and bus assembler Deven Engineering.

At present Zimbabwe’s motor vehicle industry is mired in financial woes due to competition and general economic constraints.
Duty for single cab trucks with a pay load of more than 800 kilogrammes, but below 1 400kgs was doubled to 40 percent while duty for double cab trucks was hiked by 20 percent to 60 percent.

Buses of carrying capacity of 26 passengers and above had import duty increased by 20 percent to 60 percent where as passenger motor vehicles of engine capacity below 1 500cc was increased from 25 percent to 40 percent.

“The new policy also envisages a bilateral level agreement between Zimbabwe and South Africa to facilitate car manufacturers to find a commercially viable model that focuses on the SADC and COMESA region,” Mr Sibanda said.

Minister Chinamasa said imports of motor vehicles for the period January to June 2014 account for about 10 percent of the import bill. Government controls WMMI through IDC and Itochu of Japan holds minority interest in the car assembler.

“This is despite the existence of capacity by the local assembly plants to produce light commercial vehicles, buses, Double Cabs and passenger motor vehicles,” he said.
Minister Chinamasa said a lot of foreign currency was being channelled towards importation of vehicles at the detriment of local vehicle assembly plants operating below 1 percent.

“Local assembly of motor vehicles benefits downstream industries, such as paint, carpet material, glasses, tyres, and batteries manufacturers, among others,” the minister said.

“These industries have, however, either closed or are operating at very low capacity due to low demand for goods and services from local motor vehicle assembly plants,” he said.

Willowvale fortunes could also receive a major boost from the directive that all Government Department and parastatals must procure vehicles from WMMI as per the directive of the Office of the President and Cabinet issued in 2011.