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Cheap car imports killing Zim motor industry

by Staff reporter
23 Jan 2014 at 07:51hrs | Views
Cheap car imports are affecting the performance of the country's motor manufacturing industry, which is operating way below capacity, a senior manager at Quest Motors revealed.

The car assembly plant's human resources manager, David Duma, said this last week.

Duma said the motor assembly industry was seriously affected by lack of support as locals continue to import vehicles from Japan, United Kingdom, Singapore and South Africa.

He said this crippled operations and viability of the country's three motor assembling plants.

The country has three motor assembling plants, namely Quest Motors, Willovale and AVM Africa.

These plants, with the support of downstream industries, have a combined capacity to employ more than 20 000 workers as well as meet the national market demand if fully supported.

"We are facing stiff competition from imported vehicles, being the cheap second hand vehicles coming from Japan, South Africa, Singapore and UK. These products are just being dumped into the Zimbabwean market. It's not because we can't produce products of such high quality but it's probably because people believe the imported vehicles are cheaper.

"But we cannot develop a country if we are going to rely on imported products from other countries," charged Duma.

He said the motor industry has the capacity to produce enough vehicles to saturate the local market with reserves for exportation.

However, Duma said government policies have been working against the motor industry.

"In order for us to export vehicles, they must have 40 percent local material. Considering the current scenario, such a policy has been a hinderance towards our operations. This is because the downstream industries, from which we used to buy paint, carpet material, glasses, tires and batteries, are either closed or operating at a very low capacity," he said.

Duma said government needs to borrow the South African motor industry framework, which first pegged local procurement at 25 percent before increasing it to 65 percent following the growth of the sector.

By 2012, the South Africa motor industry was employing 350 000 people and generating revenue to the tune of R220 billion, about $22 billion at the ruling exchange rate, thereby contributing an estimated nine percent to its Gross Domestic Product (GDP).

Zimbabwe's motor industry is contributing way below 0,5 percent towards the GDP.

Duma said government needs to formulate policy framework that ensures that all industrial, agri-based and small utility vehicles are supplied by the local motor industry to boost viability of the sector.

"We have got the capacity to produce quality vehicles and up to 20 000 vehicles, which will saturate the local market. We want to produce for Zimbabwe vehicles that will be used by industry, farmers and the ordinary people. We are not talking about luxurious vehicles, these can be imported. Here we are talking about passenger trucks, goods trucks that are used everyday," he said.

Quest Motors operations manager Tom Sarimana raised the same concerns.

Sarimana said Quest Motors is currently operating below five percent capacity with less than 100 workers owing to the dominance of cheap cars imports.

He added that the firm has potential to employ 1 500 workers in a one-eight hour shift producing 35 vehicles per day and over 700 per month but currently has less than 100 workers.

Source - fingaz