Zimbabwe Autos Report - Business Monitor International - Industry Reports

Zimbabwe Autos Report

Zimbabwe Autos Report - Business Monitor International - Industry Reports
Zimbabwe Autos Report
Published Aug 06, 2016
26 pages — Published Aug 06, 2016
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We forecast a contraction of --.- in CVs in ---- as weak growth in the construction industry and a challenging outlook for the mining sector to translate into weak demand for both light commercial vehicles (LCVs) and heavy trucks. Given these factors, we forecast a contraction of --.- in LCVs in ----, while heavy truck sales will contract --.- . ...The low commodity price environment has resulted in reduced capital expenditure in Zimbabwe s mining sector and a slowdown in construction growth. With commodity prices expected to remain low in ----, and political uncertainty in Zimbabwe continuing to deter foreign investment into the country, our Infrastructure team expect real growth in the construction sector to remain muted, with forecast growth of -.- in ----, and annual average growth of -.- over our forecast period ---------. Weak construction activity and government s limited ability to fund large-scale infrastructure projects will weigh on demand for LCVs and heavy trucks required to meet the logistical needs of the constructions sector. ...Our Mining team expect a mild recovery in the mining industry over our forecast period to ----, with forecast annual average real growth of -.- , supported by increased production in the platinum and diamond subsectors. This muted outlook for growth in the mining sector will constrain growth in the CV sector, especially the heavy truck segment, which are well suited to transport minerals mined in heavy industries including gold and platinum mining.

...We maintain our view that high import duties on second-hand vehicles will limit consumers car buying options by pricing them out of the market as the majority of Zimbabweans lack the income levels required to afford new car purchases. In June ----, the Zimbabwe Revenue Authority (ZIMRA) increased the import duty on second-hand motor vehicles, resulting in the duty of a wide range of vehicles increasing by about USD-------. ...The new duty regime imposed in late ---- saw importers paying more than --- of the value of the car. Passenger vehicles with an engine capacity of up to -,---cc saw their duty rise from -- previously, to -- , double cabs saw their duty increase from -- to -- and for single cabs and panel vans with payloads exceeding ---kg but not exceeding -,---kg, the duty has gone from -- previously, to -- . Furthermore, In July ----, Finance Minister Patrick Chinamas announced an increase in surtax from -- to -- on second hand light passenger vehicles aged more than - years from the date of manufacture at the time of importation, and this took effect on September - ----. ...However, we believe that the local autos industry does not yet have the required capacity or economies of scale to be competitive as the new car market remains small. Furthermore, new car sales are still reliant on government and business orders as incomes for ordinary Zimbabweans are forecast to remain below USD-,--- over our forecast period to ----, according to our Country risk team.

...Government policies aimed at boosting local production will have a limited impact on production growth over our forecast period from ---- to ----. The declining demand for new vehicles as a result of a dim economic outlook, ongoing power shortages, lack of economies of scale, and poor business environment mean that government policies are unlikely to bring in the levels of investment the government is seeking. ...

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Business Monitor International - Industry Reports—Established in 1984, Business Monitor International is a leading online publisher of specialist business information on global emerging markets. Business Monitor's range of quarterly services covers political risk, finance, macroeconomic performance, outlook and forecast, industry sectors and the business operating environment. Each Industry Report has been researched at source, and features latest-available data covering production, sales, imports and exports; 5-year industry forecasts through end-2012; company rankings and competitive landscapes for multinational and local manufacturers and suppliers; and analysis of latest industry developments, trends and regulatory changes.

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Business Monitor International - Industry Reports. "Zimbabwe Autos Report" Aug 06, 2016. Alacra Store. May 25, 2018. <http://www.alacrastore.com/storecontent/Business-Monitor-International-Industry-Reports/Zimbabwe-Autos-Report-2026-1498>
Business Monitor International - Industry Reports. (2016). Zimbabwe Autos Report Aug 06, 2016. New York, NY: Alacra Store. Retrieved May 25, 2018 from <http://www.alacrastore.com/storecontent/Business-Monitor-International-Industry-Reports/Zimbabwe-Autos-Report-2026-1498>
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