HomeBusiness DigestNissan not ready for Zim assembly plant

Nissan not ready for Zim assembly plant

FIDELITY MHLANGA
THE Japanese maker of one of Zimbabwe’s most popular vehicle brands, Nissan said this week an avalanche of grey imports had jeopardised the establishment of assembly plants in the southern African country.

Ironically, Nissan together with big Japanese brands like Toyota and Mazda, form the bulk of used cars being imported mainly from Tokyo and other Japanese cities.

Other imports originate from European markets, but these are mostly purchased by Zimbabweans working in the diaspora.

Zimbabwe imports about 60 000 used cars annually, against about 4 000 sales of new cars, according to Amtec Motors managing director (MD), Lucas Taruvinga.

This week, Nissan Sub-Sahara regional general manager Linda Mazimhaka said car assembly plants unlock opportunities in a string of downstream and upstream industries, and the country must come up with attractive policies to encourage global suppliers to establish facilities.

Mazimhaka implored authorities to come up with a vibrant automotive industry policy, which will be at the heart of future investments into the industry.

“In Zimbabwe the regulation has to be up to standard,” said Mazimhaka, who spoke during the launch of Nissan’s new Navara brand in Harare.

“There is a need to sort out grey imports because what pushes people to go and buy cars from beyond the borders is the price. So, even if we bring an assembling plant in Zimbabwe, we still have to compete with those grey imports.

“It does not make sense because the investment is so high, yet your return on investment is too little. Hence the first step that is needed is to work with the government and try to reinforce regulation – what we call the automobile policy. Once that is done, then we move to the second phase, which is looking at the financial side,” he added.

Taruvinga, whose firm is an authorised dealer for the Nissan brand in the country, said Zimbabwe must pursue the same strategy that has been adopted by South Africa, which has banned the importation of second-hand vehicles in order to protect domestic car makers.

“If you look at all serious markets like South Africa, you will never bring a grey import into (that market). Even if you are a returning citizen, who has been working in the United Kingdom, Thailand or the United States of America, they make it so difficult for you to bring the car to South Africa so that you leave it wherever you are and buy a new car in South Africa. The grey imports coming to Zimbabwe via South Africa (are transported) on the carriers because they don’t want them on their roads. That’s how strict they are,” Taruvinga said.

Setting up local vehicle assembly plants would unlock several opportunities on the Zimbabwean market, including in downstream industries.

“Every government that is serious about economic turnaround guards their automotive industry because the automotive industry has got a serious upstream and downstream effect. Imagine when we start assembling cars here, the tyre markers, paint companies, spring makers, battery makers, windscreen makers . . .Dunlop used to be resident at Willowvalle Motor Industry. So, any country that is serious about economic turnaround safeguards its motor industry and doesn’t allow grey imports. We can’t assemble here and can’t export to Mozambique because we don’t have economies of scale,” Taruvinga said.

The government in 2018 unveiled the Motor Industry Development Policy, which is  designed to promote local assembly and exportation of motor vehicles into the region and the rest of the world as well as increasing capacity utilisation of car assemblers from  levels of less than 10% to 100%.

The policy, which covers the period 2018 to 2030, is based on five strategies.

These are assembling semi-knocked down and completely knocked down kits, government support, control of secondhand imports, categorisation and regulation of the industry and the development of the motor industry value chain and cluster.

The new policy comes nearly 30 years after the demise of the last industry policy called the Vertically Integrated Companies Policy, which was terminated in the early 1990s after the government embarked on the Economic Structural Adjustment Programme.

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