The Sunday Mail
GOVERNMENT is finalising a motor industry policy that is specifically meant to address the importation of used cars and introduce incentives that might help attract investors, Industry and Commerce Minister Mr Mike Bimha has said.
It is widely expected that the envisaged policy, which will be concluded before year-end, will provide an over-arching framework for the sector.
Consultations with car assemblers, importers and spares suppliers are currently underway.
“The lack of motor vehicle policy is the reason why we do not have investors in that sector. There is no clarity and that is the confusion we want to sort out,” said Mr Bimha in an interview last week.
The cost of locally assembled brand new vehicles is considered punitive and locals have had to import vehicles from Japan, South Africa, China, Europe and the US.
However, last year’s used car imports dropped to 24,4 percent a $469 million from $620 million a year earlier.
The continued influx of used cars is squeezing the margins of domestic car assemblers.
Production at Willowvale Madza Motor Industries (WMMI) has since dropped markedly from a peak of 9 000 units per year in 1997.
At Quest Motor Corporation, the country’s second largest car assembler, capacity utilisation dropped to 5 percent by the end of last year, with only 50 vehicles sold in 2014.
“Investors want to know the climate in which they are putting their money into. If we say locally manufactured vehicles get first preference, then investors will have an incentive because it means there is a market.
“However, if the market is filled with imports, the investor may as well manufacture from his or her country and supply finished products. We need to ensure we do not deprive people from owning vehicles (sic) but at the same time see if there is a balance between the demand and increase in capacity for local assemblers,” explained Minister Bimha.
Experts believe that local importers of brand new vehicles need to be protected as well as they are also playing a crucial part in the economy.
Through the new policy, Government intends to make vehicles more affordable for domestic consumers.
“We also need to revisit if we have enough capacity to make cars and compete against established brands. We should look at the competitive advantages of making our own vehicles,” said Mr Bimha.
The policy is also expected to address the entire value chain in line with the industrialisation agenda of SADC and Comesa.
Government and other motor industry stakeholders intend to identify partners that will help control the quality and standard of both locally assembled and imported vehicles
It is believed that WMMI also needs policy support to operate viably.
Managenent at the car assembly plant are of the opinion that an initial Government order of at least 4 000 units per year will be enough to bring it back to life.
