Need to create local second-hand vehicle market: CFAO Motors

Car dealer CFAO Motors says there is need to create a second-hand vehicle market in Zimbabwe by encouraging people to buy new vehicles and submitting them back to the dealership over time.

BY TATIRA ZWINOIRA

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This comes as CFAO Motors have launched three Volkswagen vehicles onto the market — the 2016 editions of Golf 7, Jetta and Passat — at a time the company is experiencing an uptick in sales with the brand.

Speaking at the launch of the new vehicles last week in Harare, CFAO managing director Marius Prinsloo said to create a local second-hand vehicle market would require a complete ban on second-hand imports.

“First of all, we need to stop the importation of second-hand cars. All we have to do is build up new vehicle sales over time and then it will spill over and generate its own second market. What happens here is, buying a brand new car is very tough for some people because within two years’ time, the price drops so much because the ‘10-year-old grey import’ is so cheap. As a result, the brand new vehicle that is now a bit old loses value,” Prinsloo said.

“We are importing very old vehicles into our country, so people are paying money to buy second-hand vehicles instead of us generating our own second-hand market. A lot of other countries ban the importation of second-hand vehicles and for the first three years, it is tough. There is not a very big flow, but over time, it flows and becomes an automatic second-hand market, so money does not leave the country.”

He said if you generate your second market through the initial import of brand new vehicles, your value appreciates a lot more gradually, along with the ageing process and safety of the vehicle.

The call for a local second-hand vehicle market comes at a time when imported vehicles were dominating the market by huge margins.

In 2015, estimates placed second-hand vehicles at about 64 000 by the end of the year compared to an average about 3 300 new vehicles sold per annum.

In the first seven months of the year ending July, brand new vehicle car sales dipped by about 5,13% to 2 089 vehicles from 2 202 recorded over the same timeframe last year.

The dip in sales means that the vehicle retail market is expected to further experience a decline by the end of the year, largely due to imported vehicles.

Imported second-hand vehicles have found a home in Zimbabwe due to their affordability on the back of low disposable income, lack of financing mechanisms and a general decline in incomes.

CFAO Motors are licensed dealers of the Hyundai and Volkswagen brands, with the latter experiencing a growth of 195,1%.

In the first seven months of 2016, the company sold 24 vehicles from 11 vehicles sold over the same period last year.

Motor Industry Association of Zimbabwe president Luckson Gwara said in order for a second-hand vehicle market to work in Zimbabwe, focus should be on establishing manufacturing plants for big brands.

“It will only be supported by us producing cars locally, but for us to be able to do that, we need to get into a relationship with the car brand. We, therefore, need to have our economic and investments policies to be done fairly for us to be able to attract such a player. In Zimbabwe, we need to be manufacturing vehicles,” Gwara
said.

“Mind you, when you are building a vehicle, you cannot just do it for your own market. You need to be able to do it for the world. If you look at South Africa, for example, they are building for the whole world, not just for South Africa. So when you build cars, you need economies of scale to justify manufacturing.”

CFAO Motors Zimbabwe is a subsidiary of the CFAO Group, a French company represented in 32 African countries and French overseas territories.

6 Comments

  1. Banning second hand vehicles will only benefit a few dealers at the expense of the poor population who will find it difficult to buy the suggested overused vehicles. The quality of Japanese vehicles available for import is good, after all even VW is being imported. What the government needs is to lower down the duties for new vehicles so that they can become affordable and this will drive down the quantities of Japanese imports. A VW golf in SA costs lower than USD18k in SA but in Zim will cost well over USD25k.

  2. The countries that ban second hand car imports have well established vehicle manufacturing companies and fully functional financial sectors that can help customers in purchase of the vehicles. Sadly, this is not the situation here in Zim. The suggestion by CFAO Motors is therefore being made for selfish reasons.

  3. selfish

  4. very selfish company

  5. 1 million vehicles were manufactured in the UK up to end of june 2016 and yet the UK government has got no issues even if you decide to import a second hand vehicle.Import duty is next to nothing as compared to Zim .Vehicle finance schemes and technical support should be made available before Zim government starts thinking of banning second hand vehicles.

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