Zimbabwe’s Motor Industry | Read More

Zimbabwe’s Motor Industry

Zimbabwe has multiple vehicle assembly plants and supporting industries still operating. The industry can trace its roots to the Rhodesian era and has survived through Zimbabwe's most tumultuous times. Zimbabwe's motor industry has vehicle, bus, and tractor assembly plants. Although economic hardships have decimated these plants, they are still present, albeit with low production and old equipment.

• Quest Motors manufactures Mitsubishi Pajero Sport in Mutare
• Quest can assemble 20 000 tractors but only sold ten while government once again imported using connected middlemen
• Quest used to employ 6000 workers, but they only employ a hundred today.
• Willowvale makes BAIC Grand Tiger, Foton Tunland and Mazda Bt50
• Willowvale also assembles Mahindra trucks.
• In 1997 Willowvale would assemble 18 000 vehicles. Twenty years later, in 2017, that figure had whittled down to just 400 cars.
• An African car brand, Mureza Auto Company, is planning to use Willowvale to expand its car production.

The demise of the motor vehicle industry has primarily been due to mismanagement of government policies and corruption. Despite its fiscal quandary, the Zimbabwean government has always been generous with its car schemes for MPs, traditional Chiefs, Ministers, and senior civil servants. In 2018, the Minister of Finance estimated that they would need usd$145 million to fund the car scheme. The biggest problem has been that most of that money has been going towards importing vehicles rather than buying local. The reasons behind this are because imported cars are nicer (e.g., Mercedes Benzes for Ministers), and more worryingly, the importers of the vehicles are middlemen who use government links to get sales.

Government importing vehicles is actually in contravention of its own rules, namely Cabinet Circular number 16 of 2011, which states that 80% of vehicle purchases must be from local car assemblers. This has resulted in lower production and job cuts across the industry over the years. The industry is operating at less than 10% capacity.

Zimbabwean citizens themselves have played a part in the demise of the local motor industry. The tax authority revealed that Zimbabweans import 200 pre-owned vehicles daily and spend usd$500 million each year. Another reason that consumers prefer importing second-hand vehicles is that Zimbabwe has no substantive car finance options, so consumers are forced to pay in cash for cars. The lack of vehicle options and high prices of locally assembled vehicles has forced Zimbabweans to import second-hand cars at a fraction of the cost.

It is estimated that Zimbabwe needs 300 new buses every year Quest can assemble 3,000 on its own. The assembly lines at AVM Africa and Deven Engineering can also meet that demand. If the government bought all its vehicle needs from local plants, productivity would rise by 10% across the industry.

In June 2018, the Zimbabwean government launched the Motor Industry Development policy. The policy aims to raise local car production from under 10% in 2018 to 100% capacity by 2030 and is focused on five strategies to revive the industry, namely;

•     assembly of semi-knocked down kits and completely knocked down kits
•     government support
•     control of second-hand imports
•     categorization and regulation of the industry
•     development of the motor industry value chain and cluster

The policy pledges government support through purchases of locally assembled vehicles, provision of investment finance at preferential rates, export incentives, and customer hire finance to stimulate demand. The government expects that the initiative could create 20 000 jobs in the industry.

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