Car imports down 25pc

HARARE - Second-hand car imports into Zimbabwe have slumped 25 percent to $250 million in the first half of 2016 - from the $365 million recorded last year - on the back of high import duty tariffs and tight liquidity, the Zimbabwe National Statistics Agency (Zimstat) says.

The data agency also noted that the country — presently struggling with a trade deficit of about $3 billion — had seen a steady decline in car imports during the first half as cash woes continued to worsen.

A 22 percent decrease in car imports was also recorded at the close of 2015 from the $469 million spent on vehicles in 2014 to $452 million.

According to Zimstat, top sources for the cars were Japan, South Africa, Great Britain and Germany.

Economic conditions have steadily been deteriorating in Zimbabwe with massive company closures, downward revision of growth projections and high unemployment rates. All this has affected potential car owners, leading to the slump in car imports.

The figures come at a time when Finance minister Patrick Chinamasa has been successively hiking surtax on imported vehicles despite capacity utilisation for local car assemblers having fallen to less than five percent at the end of 2014.

Since the introduction of the multiple currency system in 2009, Zimbabweans have resorted to importing second-hand vehicles, as they are cheaper than those assembled locally.

However, there have been persistent calls by local car manufactures to ban used car imports, which they say have contributed to the demise of the local car industry.

Industry minister Mike Bimha is on record blaming the woes of struggling car assembler Willowvale Mazda Motor Industries and Quest Motors on the hugely-popular and affordable used cars.

According to the Zimbabwe National Road Administration, Zimbabwe’s vehicle population now stands at 1,8 million, with the bulk of them being grey imports (ex-Japanese). In an effort to reduce the widening trade deficit and protecting local industries from cheap imports, in his Mid-term fiscal review and 2016 National Budget Chinamasa increased customs duties and surtax on cars.

The Treasury chief noted that there was need for the country, which has been experiencing recurrent trade deficit in the past few years, to have confidence in locally-made products as a way of reviving industry.

However, economic experts say the trade deficit will continue to widen in the absence of strong economic reforms and a stimulus package to industry.

Chinamasa’s hike brought to 15 percent the cumulative duty increase for car imports. During the Mid-term fiscal policy review, government hiked duty by another 10 percent.

Exports in the motoring industry say vehicles worth $500 million were imported in 2014, making car imports one of the single largest contributors to the import bill.

Duty paid on importation of motor vehicles into Zimbabwe is based on the Cost, Insurance and Freight (CIF) value plus other incidental charges and expenses incurred in the purchase of the vehicle and its subsequent transportation up to the first point of entry into Zimbabwe.

Comments (2)

Thetre are no Car manufactures in Zimbabwe Cde Dull Reporter, there are car assemblers who import even the car fuses.

Tengenenge - 27 June 2016

May I respectfully point out to your Business Reporter that there is no such thing as a "MOTORING INDUSTRY." I believe he is referring to the MOTOR INDUSTRY. Industry is inanimate and cannot go "motoring." By contract, a person with writing skills on the subject can indeed be a MOTORING JOURNALIST

Richard Wiley - 29 June 2016

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