Govt moves to promote local motor industry

Govt moves to promote local motor industry
Published: 20 February 2018 (205 Views)
Government has launched the Zimbabwe Motor Industry Development Policy 2018-2030 (ZMIDP) as part of efforts to promote growth of the local motor industry and increase capacity utilisation by over 90 percentage points in the next 12 years.

Successful implementation of the policy should see capacity utilisation for local car assemblers improve from the current rate, which is under 10 percent to full capacity by 2030 while simultaneously creating employment for the sector and other downstream industries.

The local motor industry has been battling cheap imports, low capacity utilisation and low demand.

Industry, Commerce and Enterprise Development Minister Dr Mike Bimha said the ZMIDP should bring a positive out-turn for the industry and is also expected to employ at least 20 000 by 2030.

"The ZMIDP is to spearhead the revival of the motor industry sector in Zimbabwe," said Dr Bimha at the launch of the policy last week.

"The sector should be developed to a level where it would be used to benchmark with other sectors of the economy. The objective of the policy is to promote utilisation of available local raw materials and components in the vehicle assembling process," he said.

The motor industry in the country has historically proven to be a significant contributor towards employment creation, value addition as well as gross domestic product (GDP).

The sector has however lost its dominance due to the influx of imports especially pre-owned vehicles resulting in a dip in capacity utilisation.

Numerous spare parts distributors also emerged that were offering inferior quality spares, which worsened the situation.

The ZMIDP will therefore see a gradual approach being adopted in eliminating second-hand vehicle imports into the country through fiscal measures.

"Under the same strategy, a pre-shipment inspection policy for second hand vehicles will be adopted. The policy will be benchmarked with international best practices," said Dr Bimha.

In light of the policy, Government departments and all parastatals will be compelled to purchase locally assembled vehicles for their departments.

Dr Bimha added Government was cognisant of the need to support the development of the sector by offering services such as investment finance at affordable rates, exports incentives to vehicle assemblers and proffering customer funding to stimulate demand.

One of the constraints raised by the domestic market is that locally assembled vehicles are more expensive compared to imports.

"The banking fraternity is expected to provide financing to the general populace to buy locally assembled vehicles. Other measures will include establishment of Special Economic Zones for motor vehicle production," said Dr Bimha.

He added, to address consumer needs of choice, local assemblers will be allowed to grow their economies of scale in the pick-up truck segment while the rest of other types of vehicles which are not produced locally will be imported.

- online

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