30 January 2014

Zimbabwe: WMMI Returns to Original Business Model

WILLOWVALE Mazda Motor Industries (WMMI) will soon return to its original business model of assembling different types of cars in an effort to revive its waning fortunes, an official has said. WMMI, which currently assembles Mazda vehicles only, is a joint venture company between the Zimbabwe government through the Industrial Development Corporation (IDC) and two Japanese companies, Mazda Motor Corporation and Itochu Corporation. IDC chief executive officer Mr Mike Ndudzo told the Parliamentary Portfolio Committee on Industry and Trade that WMMI was considering reverting to the business model that it employed when it was established.

When it was established in 1963, WMMI used to assemble any type of car ranging from Toyota, Mitsubishi, Nissan and Peugeot for various clients on contract.

The arrangement was abandoned in 1989 when the Government directed WMMI to seek a single partner whose vehicles it would assemble.

Mr Ndudzo said due to difficulties in marketing the range of cars currently being built by Mazda, the company had decided to revert back to the old business model.

"Mazda went upstream and changed strategies and we agreed with them that we are a developing country and we cannot cope with the type of cars they want to produce, so with effect from June this year there will not be any Completely Knocked Down (CKD) kits coming from Mazda.

"What we have done is we want to go back to the old model, the way we used to operate in the pre-80s, of contract assembling where Willowvale will be assembling different types of cars for importers for a fee," he said.

"We have approached the Ministry of Finance and of Industry and Trade and asked them to change the current policy on CKD policy meaning that one can bring any car one wants provided it is in CKD and we assemble it. I am sure that is the thing that is going to come."

WMMI has been hard hit by the influx of second hand Japanese cars into the country since the adoption of multiple currencies in 2009.

Most Zimbabweans are importing second hand vehicles mainly from Japan which are cheaper compared to buying new vehicles locally - New Ziana.

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