Cabinet set to approve new motor industry policy

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Darlington Musarurwa and Walter Muchinguri
The drafting of a new automotive industry policy which aims to boost local vehicle production and component manufacturing is now complete and awaits Cabinet approval, Industry and Commerce Minister Mike Bimha says.

Minister Bimha told the Business Weekly that the draft policy was finalised after consultations with various stakeholders who included government ministries and agencies and other vehicle industry players.

“The policy has been finalised and it is now before Cabinet. After it has been considered, it will then be implemented. Obviously it (the policy) is meant to give certainty to the sector and also set parameters of what is expected of the private sector, including what is expected from Government,” he said.

“The motoring sector generally attracts many investors and this is what we are aiming for. But we have now taken a holistic approach where we consider the whole value chain, from tyres, windows etcetera.”

The Motor Industry Development Policy Framework broadly aims to boost local assembly of vehicles to 70 percent from the current levels of below 10 percent.

Since the adoption of SI64, Government has been exploring ways of reviving the country’s automotive sector which had collapsed since 2012 when Willowvale Madza Motor Industry (WMMI), a local vehicle assembly plant ceased production.

The influx of imported second-hand cars contributed to the demise of the industry and chewed up a huge chunk of foreign currency.

To reverse this trend, government and motor industry players drafted the Motor Industry Development Policy Framework.

The policy, targets to encourage both local and foreign investors to go into the vehicle value chain, create jobs, boost revenue generation and exports.

Under the policy, the Government also wants the automotive industry to resume car exports into the region and earn the much-needed foreign currency.

A healthy motoring industry, players say, has the potential to pep up sub-sectors involved in the manufacture of accessories and components such as batteries, windows and upholstery.

The new policy is also expected to have guidelines for semi-knocked-down (set of car parts that have been partly put together) car kits and how investors can partner car component manufacturers to support car assemblers.

The adoption of liberal economic policies after 1990 opened the local automotive vehicle market to stiff competition.

This negatively affected the operations of companies such as Willowvale Motor Industries, Quest, Deven Engineering and AVM as imported second-hand cars became cheaper than locally produced ones.

Zimbabwe’s automotive industry which operated at full capacity between 1997 and 1998, progressively declined as sales volumes slumped by 89 percent from 8 333 units in 1997 to 891 units in 2011.

In 2012, the National Economic Consultative Forum (NECF), a local economic think tank, lobbied government to consider the revival of the motor industry as this had a multiplier effect on the economy.

The lobby group believes the sector can potentially generate $600 million in annual revenues for government.

It also believes that more jobs could be created in this sector which shed more than 18 000 jobs from the 30 000-strong workforce that used to be employed during the 1997 and 1998 period.

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