Happiness Zengeni and Conrad Mwanawashe
Zimbabweans spent $469 million importing vehicles from different countries last year, at a time capacity utilisation for local car assemblers fell to a lowly five percent, with growing calls for the capacitation of the local car manufacturing industry in line with the objectives of Zim-Asset.
Figures from the Zimbabwe Statistical Agency show that $469,78 million worth of all vehicle types found a market in the country.
Of the vehicles, the highest value was for those for the transportation of goods at $65,37 million and 2-litre petrol cars at $59,29 million.
Apart from motor vehicles and coaches, ambulances, tractors, golf and racing cars were also imported.
The amount is, however, lower than $620 million recorded in 2013 owing to the slow-down of the economy. Most of the cars came in as second-hand vehicles as Zimbabweans continue to shun firms like Willowvale Mazda Motor Industries and Quest Motor Corporation due to affordability factors and the lack of variety.
Industrial Development Corporation general manager and chief executive Mr Mike Ndudzo said to attain viability, Willowvale, a unit of State-controlled IDC, needed to attain minimum economic off-take for completely knocked down kits of at least 4 000 units per year.
He said Government should come up with measures to enforce the Presidential Procurement Order on purchasing of vehicles by public institutions to enable the motor assembly industry to recover.
Mr Ndudzo said WMMI required policy support more than funding assistance to attain viability, adding that helping the financially distressed entity back to its feet would reduce vehicle imports, resulting in significant savings on the import bill.
“The issue at WMMI is policy support to enforce the existing Presidential Procurement Order for public institutions than capital injection so as to attain the minimum economic off-take for Completely Knocked Down operations of at least 4 000 units per year,” Mr Ndudzo said.
Quest director Mr Tarik Adam said the firm was operating at five percent capacity, warning that it will close operations in the next few months if uptake from Government and private sector did not improve.
He said the company sold only 50 vehicles in 2014, but has capacity to produce 35 vehicles a day and meet local demand.
“The uptake from Government, which is the largest buyer, has been slow and if this does not improve Quest and other car manufacturers are going to fold operations,” said Mr Adam.
He said Government has a procurement policy in place in favour of local products, but it had not adhered to it, resulting in investors being skeptical about taking positions in Zimbabwe’s motor industry.
“We are negotiating with various investors and local banks that are willing to extend funding to the sector, but they are concerned with uptake and policy,” said Mr Adam.
He said Quest did not require a capital injection, but rather Government support through the purchase of the company’s wide range of vehicles.
Zimstat said that about 30 000 coaches and buses were imported from South Africa at a cost of about $20 million last year.
Coaches and buses worth about $10 million were imported from China, while operators imported a total of 154 Yutong buses over the period 2013 to September 2014.
Mr Ndudzo said in 1997, WMMI was producing 9 000 cars per annum on single shift, double the 4 659 now prevailing car market, spread over more than six brands or makes and models.
More than 4 500 new vehicles were imported last year and of these, 857 were brands such as Toyota, Nissan 814, Isuzu 510 and Mazda 220 and all were imported from Japan.
Imports from Europe comprised 132 Land Rovers, 42 Mercedes Benz and 19 Jaguars, while a total of 289 Hyundai were imported from South Korea in Asia.
From the United States, 736 Ford vehicles, 380 Chevrolet and 120 Jeep/Chrysler/Dodge were imported.
Government hiked import duty for vehicles in the 2015 National Budget in a bid to discourage imports and promote locally produced vehicles.
Customs duty on single cab vehicles with a payload of more than 800kg was increased from 20 percent to 40 percent, buses with a 26-passenger carrying capacity and above now pay 40 percent from zero duty, while duty for double cab trucks was reviewed from 40 to 60 percent.
Vehicles with an engine capacity below 1 500 cubic centimeters had their duty increased from 25 to 40 percent.