Zim car imports cost $4 billion

via Zim car imports cost $4 billion | The Herald December 17, 2015

ZIMBABWE has spent about $4,87 billion on car imports since 2009 as consumers continue to shun the limited and more expensive local market. According to statistics from the 2016 National Budget car imports value more than doubled in 2010, increasing to $1,81 billion from $428,4 million in 2009. The figure remained almost flat the following year before hitting a record in value terms in 2012 after vehicles worth $1,1 billion were imported.

Between 2009-12, the economy grew by at average rate of 11 percent per annum. However, GDP growth decelerated sharply from 10,6 percent in 2012 to 4,5 percent in 2013. Similarly, car import value declined significantly to $717,2 million in 2013 and further to $542,5 million in 2014. In the nine months to September this year, the imports were $361,9 million.

The decline in the import bill of motor vehicles is however, synonymous with rest of the economy due to loss of disposable income among households. As such, analysts say Zimbabwe must improve in areas where the country has comparative advantage.

They said the country should focus on raising productivity, cut imports and generate exports in the face of stiff challenges of the strengthening of the US dollar, which has made exports expensive and reduced global demand caused by decline in demand from China.

“I think as a country we must accept that we are not competitive in the motor industry,” said one analyst. “Even if the motor industry was operating at full capacity, we will still not be able to compete because of the business model we are using plus the cost structure. We are buying kits and just assemble the cars without significant value addition.

“We must not waste our energy in monitoring the import bill on motor vehicle. Rather, we must focus on areas where we have comparative advantages such as the services sector.”

The Government tried to ban second hand vehicle imports four years ago but backtracked following an outcry from local car dealers and the general public.