Cash shortages hit car importers

Cash shortages hit car importers

Source: Cash shortages hit car importers – DailyNews Live

BUSINESS WRITER      1 April 2017

HARARE – The number of imported vehicles declined last year for the second
time in five years in what motor dealers have linked to cash shortages.

Official government statistics show that vehicle imports decreased by 5,3
percent in 2016 from 70 251 to 66 479 on the back of toughening economic
conditions and cash shortages.

Transport ministry official Godfrey Jombe last week told delegates at a
Zimbabwe Energy Regulatory Authority-organised Global Fuel Economy
Initiative inception meeting that the country’s car expenditure was
slowing down.

“I think this is because of the shrinking economy and then again when we
look at the years between 2007-2014, there was a gradual increase in the
registration of vehicles in this country mainly because there was better
access to foreign currency and then of course, prior to 2007,” he said.

Registration peaked at 81 840 in 2014 from 78 756 in 2013 and 66 885 in
2012. In 2011, a total of 68 116 vehicles were registered, up from the 46
411 registered in 2010.

In 2009, when the country abandoned its worthless currency for the United
States Dollar-dominated multi-currency system, vehicle registration stood
at 30 612 from 24 324 in 2008 and 23 178 in 2007.

Cumulatively, between 2008 to 2016 registered vehicles swelled by 70,8

“In 2015, that is when the country started having challenges in accessing
United States dollars. There was a drop again in 2016. As you can see,
there has been a constant decline of vehicles being registered, he said.

Jombe further forecasted that the number of registered vehicles was going
to slump further this year and next year.

” . . . Our economy in terms of accessing United States dollars was better
from 2011 to 2014, that is why the increases were recorded . . . But in
2017, as we all can agree, the greenback is hard to come by so we shall
further see declines in the vehicles being registered.

“I think 2018 might even have lesser vehicles brought into the country
because of the population’s inability to access the greenback,” he said.

In terms of net mass, Jombe said the country has a total of about 1,2
million vehicles.

“The break-down is as follows; we have got those with a net mas of up to 2
300 kilogrammes (kg) standing at about 950 000 and then we have got
another category, which is the heavy vehicles which stand at 55 000 and
their net masses are between 2 300 and 4 600kg.

“We also have another category of heavy vehicles whose net mass ranges
from 4 600 to 9 000kg and then we have got very heavy vehicles which are
over 9 000kg in net mass and these are about 15 500 currently. These are
the registered vehicles which we have at the current moment,” he said.

Since introduction of the multiple currency system, Zimbabweans have
resorted to importing second-hand vehicles, mainly from Japan, as they are
cheaper than those assembled locally.

This is despite the fact that charges on second-hand imports constitute
about 90 percent of the total buying price of the vehicle, including
customs duty at 40 percent, surtax 35 percent (on vehicles older than five
years), and value added tax of 15 percent.