Forex crunch knocks vehicle sales

Source: Forex crunch knocks vehicle sales – NewsDay Zimbabwe February 15, 2018

SALES for new vehicles in 2017 declined by 7,45% to 3 154 due to shortages in foreign currency to purchase newer vehicles.
BY TATIRA ZWINOIRA

Vehicles are still considered as a non-priority on the foreign currency priority list by the central bank.

Speaking to NewsDay yesterday in Harare, Motor Industry Association of Zimbabwe president Simplisio Shamba said the decline was due to foreign currency shortages, as compared to 2016 where second-hand vehicles were the major factor.

“It was the availability of foreign currency. All dealers (car brand dealerships) were now charging part payment directly to the local supplier (of new vehicles) in forex and part payment such as duties and everything in local currency. This is what caused the decline in sales because foreign currency was hard to get by,” he said.

“There was no way you could get money and ship it outside. For them (local dealership or supplier) to replace that vehicle, they needed to pay part of the money in forex and part of it in local currency. The local issue was not a problem because you could use bond dollars and the like, but the cost of the vehicle was in foreign currency which is what is difficult to come by.”

In 2016, new vehicle sales were 3 408.

In terms of total vehicles, including trucks and buses, the market recorded a 12,1% drop to 3 341 for the period under review from a 2016 comparative of 3 800.

Nissan overtook Toyota to be last year’s top selling brand, with an increase of 45,7% in sales to 934 from 641 in 2016.

Comparatively, sales for Toyota-branded vehicles declined by 39,4% to 441 from 728 recorded in 2016 making it the second top selling brand.

Isuzu recorded an improvement of 64,6% to 423 for the period under review from 257 in 2016.

American brand Ford, recorded the largest drop of all the branded vehicles at 58,6% to 223 by the end of last year from 528 recorded in 2016.

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    Concerned Citizen 3 years ago

    Common sense should tell you that Zimbabwe has reached a saturation point with regards motor vehicle supply and demand. You simply need to observe the traffic chaos during peak hours and the number of vehicles on sale in almost every stretch of the road. Some of these vehicles go for months or years without takers. The number of vehicles currently on the road and on sale in Zimbabwe are well beyond the capacity of our road network especially in urban areas. It should be noted that all these idle vehicles represent forex outflows in exchange for their dumping ground. As a nation we are now paying the Japanese (and other developed countries) to dump their unnecessary obsolete vehicles instead of the other way round. It’s high time Zimbabwe follows countries like South Africa in banning the importation of vehicles and that all new vehicles be assembled locally for say the next 5 to 10 years.