Grey imports sink Zim car manufacturing prospects

The country’s relaxed policies that permit the importation of used cars is hindering possible prospects by automobile companies to establish manufacturing plants, Nissan sales and operation general manager for sub-Saharan Africa, Liz Segal has said.

BY TINOTENDA MUNYUKWI/ FIDELITY MHLANGA

Drawing parallels in policy with South Africa, Segal told NewsDay on the side-lines of the third generation Nissan Navara launch last week that having an automobile manufacturing plant in Zimbabwe remained a pipe dream, until the government reviews its policy on “grey imports”.

“If the government puts a policy to ban grey imports, it would go a long way in making manufacturing viable in Zimbabwe. South Africa has benchmarks, they do not have grey imports, our automotive policy does not allow for grey imports, so establishing manufacturing goes hand-in-hand with the development of government auto policy,” Segal said.

“With grey imports, there will continue to be a challenge for all brands in sub-Saharan Africa, but what is great is being able to engage the government in auto policy or their plans around auto motor policy.”

She revealed that prior engagements had been made with the government, through the dealer’s counsel, to deliberate on the creation of an enabling environment for the establishment of car manufacturing plants that would help create many jobs for Zimbabweans.

Her sentiments deepen the debate around second-hand car imports with the central bank having come up with a recent import priority list to contain the foreign currency being siphoned out of the country through the importation of used cars.

The list places used car imports under the non-priority category and this has seen the number of used cars imported, reducing significantly since May.

A Fitch Group research company, BMI recently revealed that vehicle sales in the country will this year decline by 13,9% on the back of the ongoing liquidity crisis and weak economic growth.

Nissan has, however, managed to preserve a high market share with a decent 33,5% from 31% last year, which currently is the highest across all the automobile brands available in Zimbabwe.

23 Comments

  1. even if there was a ban on grey imports the effect would be less people owning vehicles. it makes no sense to buy a vehicle for a price north of $20000 when one doesn’t have self-owned accommodation.

  2. Nothing can happen under this regime!! Mazda, Dahmer and quest all collapsed under this government.Vote for change.

  3. What a load of rubbish. This country does not afford new cars. These plants were struggling well before we bagan buying used cars. Yet the government is making so much on the extortionate duties on fuel as there are now so many cars on the road. Plus, and very importantly, the CKDs assembled here are imported too. So that argument is baseless

  4. Talk about corporate arrogance on a grand scale…your products are way over priced. It is a fact that a brand new vehicle will lose no less than 20% of its purchase price when it is driven off the show room floor (in South Africa where all your products for the sub region a made). South Africa does not allow grey imports (which truth be told have proved themselves as durable as your supposed locally manufactured products.Second hand cars are expensive a Nissan Micra if the same year and comparable mileage You need to look at your pricing model and remove non value adding (but cost adding) activities in that regard make your cars competitive. I remember Nissan Runniville in Harare circa 2004, one of my clients (an exporter who had access to forex) required a brand new cab for the Nissan double cab 3.0TDI. We could not buy this directly from South Africa because we were not a dealer, we had to use one of your local dealers like Runniville, guess what they wanted to add a 20% handling fee even though my client was paying for the cab directly (Runniville did not have the forex to buy the cab)..I have to pay rent, staff, electricity etc said the parts manager really??

    1. I respect your intimate knowledge about this issue, as it seems you have been directly involved in the industry. I concur completely with your misgivings on the local pricing model, which incidentally are further worsened by economies of scale and cost of doing business. Utility challenges abound forcing in some cases companies without forex to seek such extortionary ‘handling fees’. However, the argument put forward by Liz Segal is limited in that it fails to put into context the underlying political environment which in itself is a huge albatross to investment. Imports have been a good relief for a local middle class which deserve to be driving better but are shortchanged by a government not prudent enough to have policy consistency which allows business to thrive.

  5. As i was reading this article i couldnt resist but notice 3 adverts asking me to buy used cars.

  6. New cars in Zimbabwe are very expensive and they are for the rich only. Second hand cars are what Zimbabweans can afford as locally manufactured cars are very expensive so much so that it is a wonder why they are so expensive yet in Japan new cars are reasonably priced. Second hand cars are the best for Zimbabwe so that everyone can afford a car in his life time.

    1. Agreed. Zim can not sustain a car manufacturing plant, period. The economy can afford grey imports and that’s it. Forget about a car plant, what with our miniscule size economy and disposable income. It’s a pipe dream. At least with grey imports, one can afford to drive a car in their life time!!!!

      1. Jongwe Rachembera

        Its scary when the general public have a better understanding of the economy….more than those who govern. This failed government has an ability to get everything wrong without much effort. If Mugabe built on what was left by the Smith government rather than destroy what functioned in a reckless attempt to “reinvent” the wheel, maybe only then a viable car industry would have been a reality but still it would have to not only serve the local market but rely on export markets to make it sustainable. Your key point is “disposable income”, Zimbabwe just doesn’t have that because of the governments inability to attract DFI’s to stimulate economic growth and reduce unemployment. Until we have a competent government, the whole country is a pipe dream.

  7. We actually want to drive new cars, we buy second hand cars from Japan simply because we have no choice. The environment makes it impossible to buy a new car. Do you know that under the current pricing model only government and a few companies can afford to buy new cars. The rest of us cannot, even university full university Professors cannot afford buying new cars, what a country!

  8. I can guarantee you that any motor manufacturer that has an assembly plant in SA will NOT open another plant in any neighboring country no less Zimbabwe. This Nissan guy is lying when he talks talk that suggests that if Zimbabwe bans grey imports then Nissan will open a plant in Zimbabwe. What business sense is there that Nissan will open a plant in Zimbabwe (600km) away from their Pretoria Plant? This guy is just saying these thing just so Nissan Zimbabwe can have a better sales record for their products. Forget that Nissan, Mazda, Toyota will open a plant in a neighboring plant. It just does not make sense for them. What he can do is lobby for reduced tariffs on their products to make them cheaper other than that, I will buy a grey import the same as the rest of africa Australia and pacific region.

  9. If and only if the writer knew how much a new car costs in Zim and how much a used car costs, they would advise the gvt to import used cars and resale them at affordable prices . who can afford a new car? Yes you may but the majority cant

    1. WELL MATE, IHAVE 2 FORD FALCONS 1998, BOTH PERFECT ( FORD CLOSED DOWN MANUFACTING LAST YEAR )
      I BET I WILL GET MANY MORE YEARS OUT OF THEM

  10. THIS REPORTER IS DRUNK,
    1ST, DONT COMPARE ZIM TO SA,SOUTH AFRICA HAS A WORKING ECONOMY AND EVEN ZIM SALARIES ARE A 3RD OF THIER SA COUNTER PARTS.
    FIX ECONOMY BEFORE YOU REPORT NONSENSE

  11. Chatunga Mhere Blantyre

    Ah rubbish real.Even if you ban car imports today and start manufacturing cars in Zim none will be able to buy those expensive cars.Grey imports are worth 1000 to 2000 dollars whereas Zim cars cost between 30000 AND 100000,SURELY THE TWO CANNOT BE COMPARED ON THIS EARTH!

  12. You remmember the days of the Pegeout 404 and Mazdas only country, it was just sad, how many can affords these $20 0000 or even $50 000 in the current economy. Plus in Zim there is too much corruption and greed on the part of Govt so such projects do not register much success.

  13. this nissan person is smoking something illegal that causes mental constipation!prices in zim for new cars are ridiculously criminal and only the elite “zanu apparitchiks and top civil servants” can afford brand new cars via taxpayers’ dollars and theft,thus only a few people can genuinely afford to buy a new car.if zim manufactureres want us to buy their cars then they should simply sell them over 5 years on account with full warranty and service plan included just like they do in south africa at affordable prices.pasina izvozvo no right thinking zimbo will buy a car from them.willowvale should import used cars in bulk,hook up with dunlop and other players in the car value chain to refurbish those cars to meet quality standards and kaboom zvinotofaya tocreater mabasa nevalue musector iyoyo apawo mabank achitipawo maloan ekutenga mota idzodzo

  14. Mrs Liz Segal can keep dreaming – her cars are for the rich and infamous of Zimbabwe, the second-hand ‘grey’ ones are for the rest of us. ‘The rest of us’ are the most important people in Zimbabwe, so Mrs Segal, keep your cars in SA.

  15. This nice South African forgot that in SA its easy because there are bank facilities to buy cars on loan. How on living earth do we buy a brand new car for $20, 000 and above on cash basis, when the salaries do not even get close to that amount per year. Uninformed commentary from this person

  16. U are crazy .Drive yo new cars isusu toada maex jap iwayo

  17. Keep dreaming and keep your new vehicles in your dreams and we will drive our ex-Japs live.

  18. Comment…kkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkk even a view mirror manufacturing company is a non starter in Zim. You are day dreaming find something to do from were you come from not in this country. After all you are not one of us. GET AWAY FROM US.

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