Martin Kadzere Senior Business Reporter
The Industrial Development Corporation of Zimbabwe (IDCZ), says negotiations to assemble Nissan vehicles at its Willowvale Motor Industries plant in Harare have been hindered by low demand of new cars and foreign currency shortages.
“While we continue to pursue the Nissan franchise, our negotiations with Nissan has been hindered by our shrinking local demand for new vehicles and the shortage of foreign currency,” IDCZ general manager Ben Kumalo said.
Analysts say given low incomes earned by the majority of the population, the affordability of new vehicles would remain a challenge in the short to medium term.
Between 2009 and 2016 (when the US dollar was predominantly a reference currency), Zimbabweans spent as much as US$4,5 billion on second hand cars, or an average US$566 million per year, according to Zimbabwe National Statistical Office.
Zimbabwe has also been facing a shortage of foreign currency largely resulting from subdued export capacity and lack of foreign direct investments.
The shortage of foreign currency has seen the country struggling to pay for essential imports such as medical drugs, fuel and electricity.
Kumalo said WMI will require enough foreign currency to import semi-knocked kits.
Still, IDCZ, the State-owned entity will continue engaging several other Original Equipment Manufacturers (OEMs) for the local production of their brands, while at the same time pursuing disposal of its majority stake in Willowvale.
The disposal of Willowvale is in line with restructuring of IDCZ subsidiaries and associate companies under the State Enterprises and Parastatal Reform Framework.
The restructuring is not only confined to total disposal subsidiaries and associate companies, but also entails liquidation, privatisation and partial privatisation.
IDCZ, in collaboration with Ministry of Industry and Commerce and the State Enterprises Restructuring Agency has already received expressions of interest for WMI.
It now awaits guidance from Government on how to proceed with regard to the short-listed EOIs. WMI is one of the leading vehicle assemblers in Zimbabwe.
At its peak, it was producing 18 000 vehicles per year before production plunged.
Some of the brands which WMI assembled include Mazda, Nissan, Mitsubishi and Toyota.
In 2017, the company entered into a joint venture with Chinese firm to assemble cars from semi-knocked down kits.
The partnership resulted in the formation of Baic Zimbabwe, a joint venture between Chinese fifth largest car maker, Beijing Automobile International Corporation and Willowvale Motor Industries.
In 2018, the Government launched Motor Industry Policy, which seeks to attract foreign direct investment into the local automotive industry by 2030.
By that time, Zimbabwe is hoping to have achieved upper-middle income status.