Motoring indigenisation looms

HARARE - Zimbabwe is making headway in indigenising the motoring industry, with authorities insisting every foreign-owned company should be majority-owned by locals.

The National Indigenisation and Economic Empowerment Board (Nieeb) — a vehicle created to implement the indigenisation programme and house assumed shares — said the motoring sector is not exempted.

“The (indigenisation) Act does not leave out any economic sector. This applies to every industry and the motoring industry is no exception,” said Wilson Gwatiringa, Nieeb chief executive.

Gwatiringa said the difference will only be in the implementation period of the policy.

“In the mining sector the compliance period is immediate, while in manufacturing industry it can be up to four years but the rest of the sectors are expected to comply within a year,” he said.

Recently, Indigenisation minister Saviour Kasukuwere, said themajority of firms in the mining sector had complied with the empowerment law in terms of general notice 114 of 2011 or had submitted plans.

Zimbabwe’s Indigenisation and Economic Empowerment Act requires all foreign controlled companies with an asset base of $500 000 or more to cede at least 51 percent of their shares to indigenous Zimbabweans.

Economic experts say Zimbabwe’s automotive industry is viewed with immense potential and could be a key driver of the country’s economy if opened up.

Willowvale Motor Industries (Private) Limited (WMMI) is currently Zimbabwe’s only car manufacturer, specialising in the Mazda range of motor vehicles with kits coming from Japan.

Apart from South Africa, Zimbabwe is the only country with an assembly industry which has the potential to benefit downstream industries like manufacturers of motor components such as rubber belts, filters, spark plugs, brake pads among others.

However, other industry players feel that instead of forcing foreign motoring companies to comply with the Indigenisation Act, there is a need to develop a local motor industry development policy that would guide the revival of the once vibrant industry.

“The policy must include a phased approach to the total ban of grey imports of motor vehicles.
“Ideally, in the interim, the importation of second-hand vehicles must be assigned to the respective franchise holders to ensure that vehicles receive a mandatory pre-shipment inspection to prevent the importation of vehicles that ready for the scrap heap, fully supported by parts and service while fully accounted for with respect to import duty and Value Added Tax,” said the Industrial Development Corporation on its website.

The demand for new vehicles for the local market has been estimated at 35 000 of which approximately 18 000 are supplied by the four main assembly plants at WMMI, Quest, WH Dahmer and Deven Engineering.

However, the demand for new vehicles contracted to an estimated 6 000 in 2011. - John Kachembere

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