The Sunday News
Shepias Dube
BUY Zimbabwe, a campaign organisation advocating for increased consumption of local products, has described the move to increase duty in car imports as a welcome development which will go a long way in boosting the capacity of the local motor industry.
The Zimbabwe Revenue Authority early this month increased import duty on used vehicles by between $200 and $400.
In an interview, Buy Zimbabwe company general manager Mr Munyaradzi Hwengwere said it was necessary to create a market for local car manufacturing companies.
“Agreed, our local assemblers may not have the adequate capacity to serve the whole market but capacity is a function of being afforded a market. If you look at countries that have evolved in these automobile industries, countries like Sweden, countries like China, at some point a decision was made that we would drive our own made cars no matter what it takes,” said Mr Hwengwere.
He said the development provided a market for the local industry to experiment as much as they could to build their efficiencies.
He said with this kind of support he was confident the local car industry could be revived.
However, the Buy Zimbabwe general manager said the noble policy should be supported by supply side measures which would make it more sustainable and effective.
“We should now afford those companies a window to operate efficiently and efficiently. We should give them things like tax holiday so that they come up and produce with speed to match demand,” he said.
Mr Hwengwere called upon Government to bring in more players in the automobile industry as this would make local cars more affordable.
“People always cry of the price but price is a function of how competitive the market is. What is now needed is to allow more players to come in and assemble within. As players increase it will have an effect on price,” said Mr Hwengwere.
He said the dictates of a competitive market would require producers to produce what suits the market and this was likely to result in a reduction in prices of cars.
Most people cannot afford locally produced cars which are considered too expensive.
He challenged the local automobile industry to observe business ethics and refrain from the tendency to abuse Government efforts to protect local industry from international competition.
“More importantly it is high time local companies start exhibiting the right corporate behaviour. There is a tendency that if people get a reprieve from Government they tend to abuse it by seeking to maximise through price hikes,” Mr Hwengwere said.
He warned that such behaviour would come back to haunt them as consumers would shun the local cars.
Buy Zimbabwe chief economist Mr Kipson Gundani said the move to increase duty was also set to reduce the country’s import bill.
“If you look at our import bill fuel commands a huge chunk of that and there is a direct link between fuel imports and Japan car imports so this development will help to curb the country’s growing trade deficit,” said Mr Gundani.
A senior motor industry consultant, who is also former national president of the Zimbabwe Motor Industry Association Mr Reggies Sibanda, said the revenue generated from the increase in duty should be directed towards equipping local car assembling companies.
Mr Sibanda said there was a long value chain that could benefit from the recapitalisation of local motor industry and these included battery manufacturers, window manufacturers, and tyre and filter manufacturers among many others.
“I urge Government to consider directing revenue from duty on cars to the productive sector, for example Willowvale and Quest, which have the potential to drive many companies,” he said.
He also said Government and private enterprises should prioritise local car assemblers when buying cars as this would go a long way in supporting the local car industry.
