Apr 24 2015

Zimbabwe used to spend over $1 billion a year importing used cars from Asia. ZIMRA (Zimbabwe Revenue Authority) had been mulling over what to do with the influx of Japanese used cars import for several years. On the plus side, it was a hugely lucrative source of income for them where it brought in more than $250-million a year in duty, but on the other, it was bleeding money to overseas and pushing local car-assemblers out of existence. Now it is importing significantly less since the government hiked up excise duty by 20% from 1/November/2014. More than 150 newly imported cars used to pass through the Beitbridge border post every day before the hike, but this had shrunk to under 40 after the onset. The government had in fact considered banning Japanese imported cars altogether in 2010 but relented following public pressure, and opted for the hike instead. The problem is that, it’s not that the public doesn’t want to purchase from homegrown car-assemblers, but they are priced out. They don’t have that level of disposable income for a new vehicle, so they are forced to opt for the cheaper import alternative. Despite the duty hike imposed by the government, importing used cars from Japan still remains popular. The attraction is evident – the vehicles are cheap, reliable, and generally still in very good condition. You also get to own a piece of machinery borne out of the engineering brilliance and innovation of the Japanese who have been at the forefront in technology for years. The local car-assemblers couldn’t compete with the very low prices of the Japanese imports. For example, a 2006 TOYOTA VITZ with very low mileage can be purchased at under $1,900. Even after you add insurance and shipping, it will come to under $3,000. Before the hike, it is estimated that over 80% of vehicles were imported from overseas as opposed to the remaining 20% by local car-assemblers.