Zimbabwe Autos Report Q3 2012

Zimbabwe remains one of the less attractive auto markets within Sub-Saharan Africa, reflecting the stilldifficult economic and political backdrop within the country. In our newly released Industry Risk/Reward Ratings for the Sub-Saharan African region, Zimbabwe ranks in 14th place (out of 17), with a score of 36.39 out of 100. A full ratings table and commentary can be found in this report.
Our prognosis for new car sales also remains downbeat, with our current forecasts calling for a total of just 8,621 new vehicles to be sold in the country in 2016. The majority of new vehicle sales will likely be to business customers, with the average Zimbabwean not having sufficient money to buy a new car.
Zimbabwe's vehicle market is similar to many of its regional peers in that the used car segment accounts for the majority of vehicles on the road. The government had been looking to introduce measures aimed at reducing the number of used vehicles imported into the country, both for the sake of improving safety standards and reducing pollution. However, in October 2011, it was reported that the government had dropped plans to restrict imports of used cars older than five years 'until economic conditions improve', according to Transport, Communications and Infrastructural Development Minister Nicholas Goche.
However, import restrictions on left-hand-drive vehicles came into effect from November 1 2011. The government has also been seeking to encourage car purchases through a system of subsidised car loans for civil servants. However, with the loan amount reportedly only totalling US$7,000, and the cheapest price for a domestically produced new car standing at US$20,000, it is hard to see how this will boost new car sales. It is more likely that public servants will use these loans to buy good-quality secondhand cars. Imported used cars form the backbone of Zimbabwe's autos market and although the government has been trying to cut back on what it considers to be the less attractive vehicles, sales were boosted in 2011 by the government budget. The country witnessed a spike in used vehicle imports, particularly through the Beitbridge Border Post, as the 2011 budget included a cut in excise duty.
While the reduction in landing costs for an imported vehicle has undoubtedly contributed to growth, rules restricting left-hand drive cars and the earlier expectation of a ban on older imports have forced consumers to bring forward purchases. In the supplier segment, a ban on sub-standard imported tyres is also under consideration. This could lead to regained market share for the European firms which previously dominated the market. The move is also aimed at lowering the number of accidents caused by unsuitable tyres, and protecting domestic tyre companies. According to Transport Communications and Infrastructure Development Permanent Secretary Partson Mbiriri, a large proportion of cheaper tyres imported into Zimbabwe cannot cope with the rough terrain and burst, leading to a large number of accidents. His department has approached the Ministry of Industry and Commerce and the two ministries will form a committee to investigate the possibility of a ban.