'Govt's Willowvale plan problematic'

HARARE - Government faces a conundrum in its bid to procure vehicles from Willowvale Mazda Motor Industries (WMMI) amid revelations that the company has no capacity whatsoever and it is actually importing completely-built-up (CBU’s) units from South Africa (SA).

This comes as Parliament has been pushing for central government to exclusively procure its cars from the Harare-based company.

Stanley Makombe, a motor industry analyst, yesterday said while the idea of capacitating such entities as WMMI was noble, it remained hamstrung by a number of factors — just as it came across as shortsighted or myopic.

“…instead of just advocating for that route (l believe) government must drive a policy ensuring that many brands are manufactured locally and where people can choose from,” he said, adding the availability of locally-built cars would not only have a greater impact on the motoring industry, but entire Zimbabwean economy.

Makombe said if not carefully considered — or implemented — the plan risked coming across as running counter to “pro-business policies” needed by President Robert Mugabe’s administration.

At a time statistics show that the Southerton-based company was averaging 10 percent of annual vehicle sales since 2010, another commentator said there was also a misconception about where WMMI was getting its trucks — in the form of the South African Motor Company (Samco) — when it was actually the Ford Motor Company (FMC).

“Parliament is a bit misguided in its notion that government institutions must procure their cars from WMMI in order to support local production when the company is actually buying from abroad,” they said.

“In the end, proponents of this local assembly theory, if not fallacy, are misinforming the public, as all Mazda trucks here are being made by FMC in South Africa, which is also churning the Ford vehicles marketed here.”

According to the latest Motor Trade Association of Zimbabwe figures, WMMI supplied 475 out of 4 400 new units sold in 2010, has sold, 866 out of 7 000 Mazda’s in 2011, 575 cars out of 6 394 units in 2012 and has so far managed 210 out of 4 767 new units this year.

Like the Mazda’s and Ford’s, all Isuzu’s, BMWs, Land Rovers, Mercedes, Nissans, Peugeots, Toyotas and Volkswagens retailed in Zimbabwe — through Autoworld, Quest Motor Corporation, Premier Auto, Zimoco, Amalgamated Motor Corporation, Clover Leaf, Puzey & Payne, Mike Harris, Toyota Zimbabwe and FCM Motors — are imported as CBUs.

With one of the motivating factors for engaging in this protectionist policy being the need to preserve WMMI’s 200-odd jobs through the acquisition of cars from the south-western Harare plant, the entire industry employs about 4 712 people.

In addition to that, a number of these heavyweight dealers and distributors have been contributing millions to the fiscus, as witnessed by a recent Zimbabwe Revenue Authority award or recognition of the top three value added tax contributors for medium-sized enterprises to Duly’s, Nissan Zimbabwe and TZ.

“To deny these companies the right to freely trade with government (a major buyer of vehicles) in favour of one incapacitated importer is not only unfair and a clear disregard of their economic contribution, but also akin to condoning a bad trade practice and perpetuating a terrible injustice,” said another analyst.

“From the stats, it is abundantly clear that not even a single importer can satisfy local demand… even in these depressed times.

“Apart from the national coffers, there are so many downstream businesses, including tyre and accessory suppliers, engineering and vehicle repair workshops, benefitting from this industry. Therefore, to deny these companies reciprocal state business would be grossly unfair.”

While the controversial policy was premised on SA’s Motor Industry Development Programme, which sought to make the country’s auto-making industry globally competitive, it would also come across as a cheap clone of the scrapped Pretoria white paper since there is no value addition.

 

Comments (2)

This is nonsense..why should government let an investment that has capacity to employ thousands lie idle so that 'dealer' can cash in? This is downright crazy. The government should unbundle the IDC and let Willowvale stand on its own and assist them as best as they can to import kits for assembly like they used to do in the 90s..Most of the cars on the roads did not pay duty anyway..what sort of a country would we be if we destroy the little we have to enrich thieves and other unsavoury characters? This once the government has its heart in the right place. Its not just Willowvale we are talking about but Quest and others.

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