News / Local
Auto spares gobble US$160m in 2021
24 Feb 2022 at 00:35hrs | Views
Zimbabwe spent US$60 million more on auto spares in 2021 than a year earlier, figures from the Zimbabwe National Statistics Agency (Zimstat) show, as trade with the rest of the world increased due to easing Covid-19 restrictions.
The easing of the pandemic restrictions and high costs involved in maintaining pre- owned vehicles pushed demand, auto parts dealers say.
More than 85 percent of vehicles in Zimbabwe, both passenger and commercial, are grey imports, commonly referred to as second-hand vehicles, because the majority of the citizens cannot afford new cars.
Auto spares imports were nearly US$160 million in 2021, a jump from US$101 million a year earlier, according to latest figures from the Zimstats.
"The business was quite huge last year, much better than in 2020 when movement of goods was restricted due to coronavirus," said Regis Ngoni, the owner of an auto spares shop in Harare's Kaguvi Street where most dealers operate from.
Another dealer said they expected demand to be strong on growing vehicle population and high cost of keeping the vehicles running.
"There is no warrant for these cars and chances of developing technical challenges after purchase are there," said another dealer who operates a shop in the Gazaland industrial area. "You then need the spares or in some instances to replace the engine."
Poor state of roads and high accidents also generate high demand for tyres, body parts and spares associated with the wheel assembly, commonly known as vehicle suspension.
"This business is giving us good profits. Some of us operate from tiny places but the money is big," another dealer said.
Additionally, as the global supply chains improved last year following relaxation of the pandemic restrictions, economic activity improved and this also boosted demand for auto spares.
According to industry experts, the market for new cars cannot support investments in new or existing production facilities.
Zimbabwe already has assembly plants owned by Quest Motors in Mutare and Willowvale Motor Industry (WMI) in Harare, but the two companies continue to struggle due to subdued demand for new vehicles.
Companies and the Government remain major consumers of new vehicles.
With average annual new car sales at 4 000, against imports of 60 000, there was no investment case for investing in new facilities, an executive with a leading car dealer said.
The executive said despite the huge economic impact a vibrant motor industry would have, lack of appetite for new vehicles and policy laxity on importation of pre-owned vehicles remains a major impediment to development of the local motor industry.
However, analysts feel while the Government has allowed grey imports to make vehicles more affordable, the thrust seems to regard vehicles as a necessity that everyone across the social stratum should have, but at the expense of local industry and job creation.
Last year, Zimbabwe outlawed the importation of vehicles older than 10 years.
Under Statutory Instrument 89 of 2021, second-hand vehicles manufactured 10 years ago, except commercial vehicles and those for agricultural purposes, will no longer be permitted into the country.
The easing of the pandemic restrictions and high costs involved in maintaining pre- owned vehicles pushed demand, auto parts dealers say.
More than 85 percent of vehicles in Zimbabwe, both passenger and commercial, are grey imports, commonly referred to as second-hand vehicles, because the majority of the citizens cannot afford new cars.
Auto spares imports were nearly US$160 million in 2021, a jump from US$101 million a year earlier, according to latest figures from the Zimstats.
"The business was quite huge last year, much better than in 2020 when movement of goods was restricted due to coronavirus," said Regis Ngoni, the owner of an auto spares shop in Harare's Kaguvi Street where most dealers operate from.
Another dealer said they expected demand to be strong on growing vehicle population and high cost of keeping the vehicles running.
"There is no warrant for these cars and chances of developing technical challenges after purchase are there," said another dealer who operates a shop in the Gazaland industrial area. "You then need the spares or in some instances to replace the engine."
Poor state of roads and high accidents also generate high demand for tyres, body parts and spares associated with the wheel assembly, commonly known as vehicle suspension.
"This business is giving us good profits. Some of us operate from tiny places but the money is big," another dealer said.
According to industry experts, the market for new cars cannot support investments in new or existing production facilities.
Zimbabwe already has assembly plants owned by Quest Motors in Mutare and Willowvale Motor Industry (WMI) in Harare, but the two companies continue to struggle due to subdued demand for new vehicles.
Companies and the Government remain major consumers of new vehicles.
With average annual new car sales at 4 000, against imports of 60 000, there was no investment case for investing in new facilities, an executive with a leading car dealer said.
The executive said despite the huge economic impact a vibrant motor industry would have, lack of appetite for new vehicles and policy laxity on importation of pre-owned vehicles remains a major impediment to development of the local motor industry.
However, analysts feel while the Government has allowed grey imports to make vehicles more affordable, the thrust seems to regard vehicles as a necessity that everyone across the social stratum should have, but at the expense of local industry and job creation.
Last year, Zimbabwe outlawed the importation of vehicles older than 10 years.
Under Statutory Instrument 89 of 2021, second-hand vehicles manufactured 10 years ago, except commercial vehicles and those for agricultural purposes, will no longer be permitted into the country.
Source - The Herald
