Zimbabwe needs motor industry development policy

There is a need to develop a local motor industry development policy that would guide the revival of the once vibrant industry.

The demand for new vehicles for the local market was estimated at 35 000 in 1997 with the effective demand being 25 000, of which 18 000 were supplied by the four main assembly plants at WMMI; Quest; WH Dahmer and Deven Engineering. The demand for new vehicles has contracted to an estimated 6 000 in 2011. The local industry is thus securing a lower base of below 33 percent of a contracting new market.

The other factor impacting the local industry price competitiveness was the South African Motor Industry Development Policy Program. Through this program the South African government was subsidizing its vehicle exports to a point whereby South African vehicles are retailing at a lower price in Zimbabwe than in their home territory.

Zimbabwe's 1986 motor development strategy, the Vertically Integrated Companies (VIC) policy had not been revived or replaced after its expiry.

"A reinstitution or adaptation of the VIC policy and other trade protocols needs to be considered. We also call for a level playing field and not excessive protection through counter-availing measures to counter the effects of the SA MIDP. The measures would include amongst others the instatement of the suspended higher duty rates on imported Complete Built Units (CBU's) and exports and or investment incentives for the automotive industry."WMMI's managing director Engineer Dawson Mareya said there was a need to develop a Zimbabwean motor industry development policy to provide a roadmap for the resuscitation of the sector.

"The policy must include a phased approach to the total ban of grey imports of motor vehicles. Ideally, in the interim, the importation of second-hand vehicles must be assigned to the respective franchise holders to ensure that vehicles receive a mandatory pre-shipment inspection to prevent the importation of vehicles that ready for the scrap heap, fully supported by parts and service while fully accounted for with respect to import duty and VAT"said Engineer Mareya.