Open up car industry


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News that Peugeot and TA Holdings are planning to assemble vehicles here is good news indeed because despite the limitations, cars assembled in Zimbabwe -on a dollar-for-dollar basis- are much cheaper than in Botswana or South Africa. Used cars, on the other hand, seem to mature with age like wine and become more expensive as they get older.

This poses something for the economic planners to seriously think about because the same privileged people who used to get new cars are still getting them and are reselling them at even much higher prices than prior to the Willowvale scandal.

The argument to reduce the different types of vehicles assembled in the country to facilitate the availability of spares no longer holds water under the present economic structure. Moreover with restrictions on the importation of used cars relaxed, there will be many more aged and at times outdated models coming in.

One baffling thing is that the much-heralded technology transfer between Willowvale Motor Industries, Mazda and C.Itoh and company does not seem to have brought about the anticipated fruits. The company still concentrates on assembling No Currency Involved (NCI) vehicles instead of assembling those for locals without that foreign currency. The plant, like all others, is also operating way below capacity.

This obviously implies something is terribly wrong, especially when one takes into account the fact that C. Itoh and Company is the world’s second largest trading company according to the Times 1000. This leads one to suspect that if there was reasonable return on its capital, C. Itoh could pour in more money and Willowvale would be able to import more technology and thus assemble more cars.

If the same was done with Nissan, Japan’s second largest car manufacturer and within the top 50 companies of the world, and also with Peugeot and Fiat (all of which already have interests in the country), Zimbabweans would not have to trek to South Africa or Botswana to buy cars that have been dumped. Cars themselves would depreciate by age as they are doing in South Africa and Botswana.

With the market flooded, incentives would also be introduced to enable people to buy these cars instead of insisting on high deposits that most people cannot afford. Perhaps our problem is that senior government officials and politicians still consider cars to be a luxury, and not a necessity. After all, they are either issued vehicles to use for free or they are allowed to buy at cost if new or at book value if used which in real terms means they are literally given the cars for free.

(17 VIEWS)

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The Insider

The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.

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