adminLorraine Muromo – Business Reporter
GERMAN car maker Volkswagen has severed ties with local dealership FCM Motors, which is owned by businessman Mr Freddy Mtanda, and has instead partnered CFAO Motors.
Mr Mtanda is fighting a slew of graft allegations after the Zimbabwe Anti-Corruption Commission alleged he defrauded CAPS Pharmaceuticals by shipping drugs worth US$26 million from the Harare plant and registering them in foreign territories.
It is understood FCM is contesting VW’s decision before the courts.
CFAO managing director Mr Marius Prinslo said VW had entered an agreement with African Automotive Trading, CFAO Motors’ subsidiary, to re-organise distributorship in Kenya, Zambia, Malawi and Zimbabwe.
“We will increase the presence of the brands in Zimbabwe and it is our belief that we can achieve top-five status within the short to medium term. Our clear marketing and sales strategy will be the creation of greater awareness of Volkswagen and its models.
“The Volkswagen brands have enormous market potential, based on their international reputation for customised innovations, high quality, and reliability.
“This investment in Volkswagen Zimbabwe is based on a confident expectation that the future market here is both positive and attractive.
“Volkswagen brands have enormous market potential based on their international reputation for customized innovations, high quality and reliability.
“Our planned operations roll-out will be beneficial for customers, the motor trade and the country as a whole,” said Mr Prinslo.
The local VW brand has a one percent share of the market but it intends to increase it to 12 percent in the next five years.
CFAO Motors plans to invest another US$1,5 million in the business after pouring US$1 million into acquisition of 21 000 square metres of land to build a permanent facility.
The Volkswagen group, with its headquarters in Wolfsburg, is one of the world’s leading automobile manufacturers and the largest car maker in Europe.
In 2014, the group increased the number of vehicles delivered to customers to 10,4 million units.
Models on sale include the Polo Hatch, Polo Sedan, Tiguan, CC, Touareg, Caddy, Amarok, T5 Bus/Van and Crafter.
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