South African car dealers have started reducing prices of pre-owned vehicles mainly from Japan, Singapore and the United Kingdom at Beitbridge Border Post as they battle to clear huge stocks which have been necessitated by low business in the last four months. Major dealers such as Quest Royal, Wright Cars, Autonet, Kumura Motors, Jakes Auto and KDG have from Friday last week reduced prices of old stock to create space for new stocks from Durban.
It is also understood that other car dealers have reduced prices to meet their obligations with the South African Revenue Service (SARS) to sell the vehicles within a period of 12 months. One of the car dealers said on Friday that in the event that they violate the conditions of the bond with SARS they are fined R20 000 per vehicle.
Wright Cars Sales manager , Mr Clemence Mabidi said they had reduced vehicles including Nissan March, Toyota Ipsum, Mazda Demio, Nissan Xtrail, Toyora Runx, Toyota Voxy, Volvo F80, Toyota Passo, Toyota Nadia and Mazda Atenza to between $500 and $2 800.
“Business is very low these days after Zimra increased the import duty to around 96 percent. This has resulted in a fall in the demand of cars and at the sometime we want to meet our bond conditions with SARS,” said Mr Mabidi.
“We want to clear old stock so that we can be able to bring in new stocks from Durban. Business is relatively low as compared to the previous years.” Mr Mabidi said they were selling an average of four vehicles per day as compared to 40 in the previous months. He added that many car importers now prefer to use less busy ports of entry such as Kazungula, Plumtree and Chirundu to avoid the pressure at Beitbridge Border post.
Another car dealer, Mr Nasir Khan of Quest Royal Investments said they had reduced prices of vehicles by between $300 and $400. “Business is very low and we have to adapt to the market forces and hence we have slashed the prices. Furthermore we will be running special promotions so that we clear the current stocks,” he said.
Mr Khan said they were looking at selling vehicles at prices similar to those in Durban. A customs official at Beitbridge said though prices of vehicles had fallen on the South African border, duty tariffs were still the same. “We are calculating duty on all imported vehicles using prices on our national catalogue,” said the official.
Zimra’s director of Legal and Corporate Affairs Ms Florence Jambwa confirmed recently that vehicle imports through Beitbridge had fallen since the beginning of September. “Vehicle imports have generally decreased in September as compared to August. Between 1 and 14 September, we processed 610 car imports, a decrease when compared to the same period in August where a total of 864 vehicles were cleared,” she said.
She said at the moment they were are processing between 31 and 65 vehicles per day as compared to 32–133 vehicles per day in August this year. Cars sales started declining after Finance and Economic Development Minister Patrick Chinamasa increased Surtax from 25 percent to 35 percent on second-hand light passenger motor vehicles aged more than five years from the date of manufacture at the time of importation.