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Zimbabwe's Auto Industry Struggling To Cope After Flood Of Japanese Second-Hand Cars

posted 23 Oct 2013, 09:19 by Mpelembe   [ updated 23 Oct 2013, 09:19 ]

Zimbabwe's once lucrative auto industry battles to survive following import of cheap second hand vehicles from Japan. The country is still struggling to rebuild its economy after a decade of recession marked by hyper-inflation and chronic shortages of food and foreign currency.

HARAREZIMBABWE  (REUTERS) - Thousands of cars ply the streets of Harare, Zimbabwe's capital every day. But despite having a once thriving motor vehicle industry, a majority of the cars on Zimbabwe's roads are imported from abroad.

Industry officials report that cars worth more than 200 million US dollars were imported in the first five months of 2012 alone.

The country's fragile economy had started to stabilise after a unity government in 2009 halted a decade-long recession. But businessmen in the motor industry fear the economy is still on the decline even after the July re-election of President Robert Mugabe, who has been in power for more than 20 years.

"Business is not good at the moment and things started being slow just before elections, even now after elections, we were expecting at least to be in a better position after elections, and at least people will know what they want to do, they could plan but now its like things are getting worse and worse," said Elvis Masango, a car dealer in Harare.

Many of the imported second hand cars come mainly from Japan with the cheapest car costing as little as 1000 US dollars.

"Cars from Japan have been made for first world economy, these are first world cars, these are far better than cars from our local industry, or from South Africa or from Europe, cars from Japan are far better, than all these cars from other countries, they are more comfortable, even the interior inside, you can see they are far better," said prospective car buyer, Francis Foya.

Economic analysts like Christopher Mugaga, however, say the importation of Japanese vehicles is harming the local auto industry and the government needs to put measures in place to regulate the industry.

"If you look at the current trends in the automobile industry, you realise that the Japanese market, the auto car industry of Japan is slowly but surely getting to become an area where they considerZimbabwe to be one of their dumping grounds for their products knowing very well that not less than 90 percent of cars which are bought or changing hands are generally second hand cars in Zimbabwe," said Mugaga.

One of two car factories in the country, the local Mazda assembly plant has been forced to shut down because of the influx in second hand imports.

Nevertheless, this downward trend has not discouraged some high-end car dealers operating showrooms in the city. Like many burgeoning African cities, Harare boasts a growing middle class who have a taste for luxury brands.

"However, one can look at it and say more Zimbabweans can afford compared to yesterday, but in terms of benefits you can see that they are being outweighed by the cost which is being imposed by the populace of vehicles which are plying routes in Zimbabwe," added Mugaga.

In the 1990s Zimbabwe's auto industry used to employ an estimated 200,000 people and now officials say less than 2,000 people work in the industry.