Govt to complete motor industry policy

via Govt to complete motor industry policy – NewsDay Zimbabwe July 10, 2014 by Victoria Mtomba

THE government is set to complete the motor industry policy soon that will help in the assembling, importation and value addition of the motor vehicles in the country, an official has said.

This comes as cheap imports mainly from Japan have killed local assemblers.

Speaking on the sidelines of the launch of new coaches from China, director enterprise development in the Ministry of Industry and Commerce Stanislaus Mangoma said the policy framework would help the industry as it was relying on instruments from various ministries. Mangoma said the ministry did not have a fully fledged framework to use for its purposes.

“Currently we are crafting a Motor Industry policy that will address issues of importation, assembly and value addition within the country. We are almost complete with that policy framework, but it will have to go through the relevant arms of government to make sure that we assemble on the basis of a policy frame work,” Mangoma said.

The policy framework, he said, will be consistent with what other developing countries were doing, particularly coping from the South African model where they received considerable subsidies for their motor industry development policies and offered the requisite incentives and the correct policy framework.”

The country has been using the 1986’s motor development strategy, the Vertically Integrated Company policy that was not replaced after the documents expired at the inception of the Economic Structural Adjustment Programme in 1991.

It is estimated that in 1997 demand for new vehicles stood at
35 000. Of that 18 000 was supplied by the four assembly plants –Willowvale Mazda Motor Industry, Quest, WH Dahmer and Deven Engineering.

The demand for new vehicles contracted to an estimated 6 000 in 2011. Demand for new vehicles continued to contract as more people resorted to pre-owned vehicles from Japan.

The motor industry in this country is facing various challenges that include low disposable income, low capacity utilisation and competition from vehicles imports.

The Industrial Development Corporation which owns Willowvale Mazda Motor Industries and Deven Engineering argues that countervailing duties remained suspended for completely built unit vehicle imports, leaving the field uneven against South African assemblers who enjoy 40% rebate on the exports to Zimbabwe. This has rendered South African assembled vehicles cheaper in Zimbabwe than in South Africa.

“The world over, vehicle assembly which drives the motor componentry business is utilised as an industrialisation strategy, and is therefore buttressed by government policy and fiscal support,” IDC said.