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Shepias Dube Business Reporter
THE Competition and Tariff Commission (CTC) has said the absence of a comprehensive policy which seeks to promote the growth of local automotive companies was hampering the development of a viable motor vehicle industry in Zimbabwe. In a report to the Ministry of Industry and Commerce, which Sunday News Business is in possession of, the commission said there was a need to come out with a coherent motor industry development policy which would promote the country’s automobile industry.
“In order to kick-start the revitalisation of the industry, there is an urgent need for Government to put in place a coherent Zimbabwean Motor Industry Development Policy (ZMIDP), which will allow local assemblers to grow while existing in harmony with Completely Built-up Units (CBU) imports,” read part of the report.
The report read that ZMIDP should have a supportive duty for a limited period of 10 years, during which the industry will be revamped.
The commission said the supportive duty must be biased towards light commercial vehicles.
“As the local industry’s production is mainly concentrated on light commercial vehicles as opposed to passenger vehicles, it would be prudent to initially promote this segment and build on what is currently obtaining,” reads the report.
To further protect locally made commercial vehicles the commission suggests that duty on commercial vehicles should be reviewed from around the 25 percent to the previous level of 40 percent.
The commission also called for the creation of a dedicated fund which should inject new capital into local assemblers. This would capacitate local companies to recapitalise and carry out research and development programmes. The report read that while the recapitalisation programme is in progress, second hand vehicles should be imported as an interim measure but with a restriction on the age of the vehicles to a maximum of three years.
The CTC proposals also emphasised the need to capacitate the local financial sector to start providing credit facilities at affordable rates and favourable tenure for capital expenditure and working capital purposes. On the demand side, the commission said the proposed motor vehicle policy should set in motion a Buy Zimbabwe campaign which would stimulate the buying of locally assembled vehicles.
“As a sign of commitment to the programme, the public sector must procure their vehicle requirements locally so as to guarantee minimum orders keeping the assemblers afloat,” reads the report. Buy Zimbabwe Campaign general manager Mr Munyaradzi Hwengwere said if implemented the proposals will go a long way in resuscitating the country’s ailing motor vehicle industry.
He, however, said this could only be possible if Government and the private sector show unity of purpose. “There must be harmonious working relations between the Government and the industry. Government must take heed of industry’s views, needs and concerns and the vice versa should also apply,” said Mr Hwengwere.
He also said there was a need for the development and support of local parts manufacturers as this would cut on the import bill currently used in importing car parts.
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derick.khumalo