Vehicle imports crowd out domestic makers

ZIMBABWE has, over the past two years, imported over US$70 million worth of public buses and delivery trucks, draining the country of the much-needed foreign currency to the detriment of local manufacturers.

BY MTHANDAZO NYONI

This is revealed in the country’s new five-year economic blueprint, the National Development Strategy One (NDS1) launched in Harare on Monday.

The document acknowledged that major vehicle manufacturing companies in Zimbabwe have idle capacity which can be used in the production of buses and delivery trucks, but that is not happening.

“Over the past two years, the country has imported over US$70 million worth of public buses and delivery trucks taking advantage of a lower duty regime. This has drained the country of the much-needed foreign currency to the detriment of local manufacturers,” the document read in part.

“This is despite local industry having capacity to competitively produce 65 such buses and 100 delivery trucks per month with a local content of over 50%.”

With the new blueprint, the government seeks to support local industry to increase the supply of domestically manufactured buses and delivery trucks.

This, it said, would benefit downstream industries that provide inputs such as bolts, batteries, steel sheets, tyres, upholstery, paint, carpet manufacturers and other accessories.

“This will also align to the requirements of the African Continental Free Trade Area of a threshold of 35% local content,” the document read.

“In addition to local production of buses, a strategy to enhance local assembly of private vehicles will be developed. Once implemented, this strategy will have far reaching impact in terms of job creation and reduction of the import bill spent on new and recycled vehicles and accessories.”

Government will also take deliberate measures to facilitate the domestic assembly of buses.
It expects to increase the number of locally-produced buses from 16% of total new buses in 2020 to 60% in 2025; increase the number of locally-produced delivery trucks from 4% in 2020 to 40% by 2025.

It also seeks to reduce the import bill on buses and delivery trucks by 44% and 36%, respectively, by 2025 as well as increase the number of people directly employed in the production of buses and trucks from less than 50 in 2020 to over 4 500 by 2025.

On strategies to support the domestic assembling of buses and trucks, measures will be put in place to utilise idle capacity for the production of higher capacity buses and delivery trucks, which are cost effective.

To achieve this, the document said government should prioritise procurement of locally manufactured buses and trucks; enhance strategic partnerships with financial institutions to mobilise financial resources based on guaranteed order books, facilitate retooling, encourage importation of completely knocked down and semi-knocked down assembly kits through removal of import duties and manage the importation of buses.

There are three vehicle assembly companies in Zimbabwe, namely AVM Africa, a bus and truck maker, Quest Motors and Willowvale Motor Industries including its bus-making subsidiary Deven Engineering.

Quest has over the years assembled Volvo, Leyland and Nissan buses. It currently holds the franchise to build Chinese-owned Yutong and Zhong Tong buses.

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