Car prices shoot at Musina as panic buying sets in

Instead of dipping, car prices at Musina across the border in South Africa went up by an average 20% due to panic buying caused by a new Government policy on second hand cars.

Eric Dzvova, a prominent clearing agent at Beitbridge told Two Nations that the prices of second hand cars across the border have gone up significantly following Finance Minister Mthuli Ncube's policy announced on budget day in November.

Analysts had expected merchants of second hand Japanese cars to lower the prices in order to clear stocks of cars manufactured before 2009.

Mthuli banned the importation of cars manufactured before 2009 but instead of lowering the prices to clear the stocks, many people rushed to buy the cars to beat Ncube's deadline thereby increasing the demand.

Dzvova said that for example a Honda Fit that was going for US$1 600 is now going for US$1 900.He also said Mthuli's policy alone was not enough to push the prices down because even if Zimbabweans are not going to buy these old models, the Japanese cars are also bought by Mozambicans, Zambians and Malawians and the Zimbabwe market is just a portion.

"The demand for cars is high since the new law was pronounced. However, transportation of cars across the border is slow because of congestion at the border. Where 10 or more couriers used to transport cars per day, we have two now because of the congestion. As a result a lot of cars are stuck on the South African side," he added.