The Herald (Harare)

Zimbabwe: Banks Ready to Bail Out WMMI

BANKS say they can finance the local motor industry to assemble vehicles for sale in Zimbabwe at competitive prices, as well as provide car loans to the general public.

Bankers Association of Zimbabwe president Mr George Guvamatanga said this week that they could fund both car assembly plants and ordinary people who needed vehicle financing.

Willowvale Mazda Motor Industries says under optimal conditions it can sell its cheapest brand new vehicle, the Mazda 3, for less than US$10 000.

Finance Minister Patrick Chinamasa has expressed misgivings over the importation of second-hand vehicles which he said were a waste of currency.

Zimbabweans imported 206 519 cars worth over US$606 million between January and November 2013, according to the Zimbabwe National Statistical Agency.

But the Central Vehicle Registry said it registered 77 580 vehicles in 2013.

This means most vehicles brought into the country last year were not registered.

Car dealers in Harare are complaining of subdued prices as people are increasingly importing vehicles individually, mainly through the ports of Durban (South Africa), Dar es Salaam (Tanzania) and Walvis Bay (Namibia).

Mr Guvamatanga said of local vehicle assemblies: "There is need to address the whole value chain. For there to be positive results, there is need to fund not only those that assemble cars, but those who are going to buy them by providing reasonable periods of loan repayment."

Mr Guvamatanga said this would also entail reviewing import duties, taxes and redeemable benefits.

He said banks were lending at higher interest rates because they were using money from third parties like the African Development Bank.

"We need to encourage people to make savings, that way we would lend from these deposits at a reasonable interest rate," he said.

Willowvale Mazda Motor Industry managing director Engineer Dawson Mareya said if they were adequately supported financially and from a policy perspective, it was possible to sell vehicles for less than the US$20 000 that their Mazda3 costs.

"After a period of three to four years these vehicles would become second-hand vehicle stock for first-time buyers," he said. "Indeed, US$4 000 should be enough to buy locally assembled second-hand vehicles.

"If the demand for locally assembled vehicles enables the local assemblers to go back to full production, the company should be able to produce vehicles that will sell for under US$10 000 which will be very reasonable. Such vehicles will then sell for less than US$4 000 in three to four years."

Eng Mareya said they could assemble models other than Mazda with the right support.

"WMMI is now in a position to assemble any brand following strategic repositioning recently announced by the Industrial Development Corporation of Zimbabwe, he said.

This will enable the company to assemble other brands, provided that protection measures for the industry are put in place without further delay."

The subject elicited strong responses from many readers of The Herald, who posted their sentiments on the paper's Online platform.

Progressive Zimbabwean was sceptical that local car assemblers could meet demand.

"They produce a maximum of 18 000 cars per year against a demand of over 200 000 cars, said the reader. Current installed plant capacity for both Quest and Willowvale will not address the problem of inadequate supply.

Another reader, Chokwadi, had no kind words for vehicle assembly firms.

"Government has done enough by relaxing taxes on importation of raw materials for most of these cry babies and they still won't come down on their prices," said Chokwadi.

Another reader, Kunta Kinte Dread, said a profiteering mentality had gripped Zimbabwean businesses, resulting on the high prices of locally assembled vehicles.

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