Zim Car assembler suspends Mazda 3 production

HARARE - Car assembler Willowvale Madza Motor Industries (WMMI) has suspended the production of its sleek Mazda 3 model due to uncompetitive pricing, Daily News reported on Thursday.

Local dealers have been struggling to sell off the model, retailing as high as $32 000 a unit, due to what customers believe is a "hindering price".

This has resulted in the state-run monopoly suspending its production so as to re-negotiate with its suppliers.

"We have been focusing on those models we believe would sell quickly to create a quick turnaround of our working capital.

"The Mazda 3 will be available on the market soon," said Dawson Mareya, WMMI's chief executive. Mareya said the company's production capacity had plummeted to a 10 percent low due to working capital constraints and stiff competition from South African imports.

"WMMI can produce up to 1 000 units per month on a single shift," Mareya said.

"What is currently impacting on our competitiveness is the fact that imported vehicles from South Africa are heavily discounted by up to 45 percent due to the Motor Industry Development Policy that was put in place over 20 years ago," he said.

WMMI boss said there was need to implement policies that would protect the local motoring industry from cheap car imports.

"What we need as an industry is really not protection but the levelling of the playing field through the enhancement of the duty tariffs on imported vehicles in order to make us compete favourably.

"In fact our studies have shown that the market prices of most of our vehicles are actually lower than those with similar specifications on the South African market," Mareya said.

"Our main reason for banning the grey imports is to save the country's meagre resources by ensuring that what is imported does not lead to a further drain of these resources to keep the vehicles on the road since there is currently no control on what is being imported in terms of the number of makes, models, engine capacity and even the residual life of these vehicles," he said.

Mareya said WMMI's production had also been affected by the Tsunami disaster in Japan earlier in the year. "Yes, it led to a reduction in our order off-take. In fact this affected all vehicles sourced from Japan.

"We are now planning to ramp up our production because the effects of the Tsunami have now been dealt with," he said.

Mareya said the company's shareholders remained committed to the business despite its slow down.

"Capitalisation of any business is always a moving target, depending on its business strategy and thrust. We have a cocktail of financiers both off-shore and through the local banking fraternity that have enabled us to stay in business. The shareholders have contributed to the viability of the business in other various forms," he said.

Challenges facing the local motor industry come on the back of efforts by government to effect a ban on vehicles older than five year through the ministry of transport.

Despite a July deadline, the government has been forced to extend up to October after public a outcry.

At its peak WMMI produced up to 9 000 units a year and the other assembly plant in Mutare used to also push the same number of units to give a total of 18 000 units while the total market for new vehicles was around 25 000 units per year.

WMMI suspends Mazda 3 productionGovernment has decided to effect a ban on vehicles older than five years to protect the local motor industry.