Zimbabwe

Car industry running out of gas in Zimbabwe

Imports from SA rise as industry points finger at government

02 December 2018 - 00:00 By VUYO NDABA

While vehicle exports from SA to Zimbabwe are increasing, the authorities in Harare are intent on reviving their local auto industry.
Customs statistics rank Zimbabwe as the 12th-biggest export market for vehicles made in SA, raking in billions of rands for the industry.
At the annual congress of the Motor Industry Association of Zimbabwe (MIAZ) in Victoria Falls this week, Grant West, publisher of AutoForum magazine, challenged the Zimbabwean motoring sector to think outside the box and tap into the available market for cars and parts.
According to the South African Revenue Service (Sars), the country made R2.56bn last year from vehicle sales to Zimbabwe of close to 3,000 units. In 2016 Zimbabwe was SA's 13th-biggest vehicle market, with imports of R2.4bn.
Zimbabwe's motor industry has been in decline for many years since the late 1990s due to political and economic instability.
Its contribution to GDP is estimated to be just 0.2%, according to figures released this year by MIAZ. The association said an industry that in its heyday employed 30,000 people now provides fewer than 4,000 jobs.
Now the authorities have announced measures aimed at breathing new life into the industry, including the imposition of a foreign-currency excise duty on second-hand vehicles from 2019.
NEW CARS IMPORTED FROM SA
SA's exports of new cars account for 3% of auto imports into Zimbabwe. The bulk of Zimbabwe's imports are second-hand vehicles from Japan.
Ghana and Kenya are the top African markets for SA on the continent.
The government in Harare is also trying to reduce imports of "unroadworthy" used vehicles, which have been blamed for many road accidents. However, industry players accuse the government of policy laxity and say the industry should be allowed to control imports of vehicles.
Since January, a total of 86,593 vehicles have been registered in Zimbabwe. Of these, fewer than 3,000 were new cars, most of them from SA.
West, citing the Sars figures on South African vehicle exports to Zimbabwe, told the MIAZ congress: "All the Zimbabwe auto industry is doing is service and repair the same vehicles over years. Go and speak to your neighbours so that you grow your automotive industry. There is a need for a collaborative policy framework between government and all players."
West urged the Zimbabwean auto industry to seek synergies that would allow mothballed manufacturing and assembly plants to reopen.
Association president Simplisio Shamba referred to the current situation as a "free for all" because of the government's policy shortcomings.
LOCAL INDUSTRY FACES CHALLENGES
Shamba challenged the Zimbabwe auto industry to look beyond the current challenges and to use the vast amount of data available in the country to explore the market.
The major items imported by the Zimbabwe auto industry include light vehicles, tyres, filters, batteries, engines and brake components.
Abednico Bhebhe, director of Fisher Motors in Bulawayo, said the prospect of Zimbabwean manufacturing and assembly plants collapsing was "terrible".
He added: "Some policies weakened the industry and benefited SA, where government and parastatals are the biggest buyers."
Bhebhe said partnerships should be forged with South African industry players and Harare should implement stringent restrictions on imports of used vehicles.
He said the government should allow MIAZ to control vehicle imports with a view to reviving the industry and ultimately banning imports of second-hand cars.
Bhebhe has played a key role in reviving Fisher Motors, whose main focus is engine reconditioning. It was struggling financially when he took control of it nine years ago...

This article is reserved for Sunday Times subscribers.

A subscription gives you full digital access to all Sunday Times content.

Already subscribed? Simply sign in below.

Registered on the BusinessLIVE, Business Day, Financial Mail or Rand Daily Mail websites? Sign in with the same details.



Questions or problems? Email helpdesk@timeslive.co.za or call 0860 52 52 00.

X