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Zambia Autos Report Q1 2012
Business Monitor International, Nov 2011, Pages: 26
Business Monitor International's Zambia Autos Report provides industry professionals and strategists, corporate analysts, auto associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Zambia's automotive industry.
In its inaugural Zambia Autos Quarterly Report, BMI examines opportunities for growth and reports on increasing interest from foreign carmakers in exploiting the unsaturated autos market in the country. Vehicle ownership levels in the country are very low, even by regional standards, but that also creates significant opportunities for growth in the new vehicles segment.
Industry estimates show that new vehicle sales have grown almost four-fold in the past four to five years, which BMI believes came on the back of increased purchases by local businesses or the government. BMI expect the market to more than double by the end of BMI forecast period, with the market shifting more than 7,100 units by 2016, compared with the 2,500 units sold in 2010.
Despite the small size of the market, international players - particularly Asian companies - have been stepping up their presence in the country. Toyota Motor currently stands as the most popular carmaker in Zambia and the company has indicated its intent to maintain its dominance with a US$3mn investment. India's Tata Motors has long considered Zambia crucial to its expansion strategy in southern Africa, and accordingly it revived its manufacturing operation in the country in 2006. More recently, Higer, a Chinese bus manufacturer, has indicated its plan to assemble buses from imported kits in Zambia, without mentioning the size of its potential investment.
BMI, however, currently sees little prospect of a robust autos manufacturing industry in Zambia. Autos manufacturing collapsed, largely due to the absence of a local suppliers' base, which made small-size operations unviable. Recently, the government has been wooing carmakers to invest into local manufacturing. It has offered assistance towards providing land for Higer's project and also indicated it will support Toyota's investments in the country. In the absence of a local manufacturing segment, the government has also suspended customs duties on equipment used to manufacture motor vehicles and motorcycles for five years.
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