Foton to invest US$200 million in Quest, WMMI?
CHINESE Chinese car manufacturer Foton Motor Group has expressed interest to invest in excess of $200 mln in Zimbabwe’s two motor vehicle manufacturers Willowvale and Quest Motors.
Founded in 1996, Foton is headquartered in Beijing, China. Its business scope covers full series of commercial vehicles, including medium and heavy-duty trucks, light-duty trucks, VANs, pickups, and buses, and an accumulative production and sales volume of approximate 6 mln vehicles annually.
The company’s presence in the country is currently through the Quest Motors franchise.
A well-placed source told FinX that the group’s representatives are currently in the country conducting physical checks of existing plants.
“The Foton Motor delegation have visited both Willowvale Mazda Motor Industries and Quest Motors and have indicated an initial $200 mln investment in the plants,” the source said.
The source said the company is looking at assembling locally low cost vehicles as part of a broad strategy of capturing volumes.
Willowvale Mazda Motor Industries (WMMI) which is currently not manufacturing stopped production in 2012 when capacity plunged to below 4 000 units from a peak of 18 000 vehicles per year in 1997.
Willowvale is 60% owned by Motec Holdings, which in turn is 75% controlled by the state-owned IDCZ and 25% by Itochu of Japan.
Quest Motors director Tarik Adam said in an interview that the company has witnessed an increase in production of the Foton Tunland Double cab during the year while the Foton Tunland Single Cab is also currently in production.
He said that Quest had also started producing Foton Lovol farming tractors this year with more kits set to arrive from Asia for increased production.
Tarik said Quest Motors on its own expects to invest over $1 mln next year in new accessories at its plant in Mutare in a bid to broaden its product range as the company anticipates a turnaround of the country’s motor industry.
Adam said that 2016 will improve as Government through Ministry of Industry will see the introduction of The Zimbabwe Motor Industry Policy which aims to revive the entire Motor Industry sector.
“In 2016 we are looking at introducing a new accessory line which will help broaden our range of products being produced through the plant,” he said.
He said in 2015 the company focused mainly on commercial vehicles which contribute the biggest percentage in new car sales in the country.
“In 2016 we intend to launch a new sedan brand to add to our existing Chery vehicles,” he said.
Tarik said capacity utilisation is still low with the current installed capacity of 35 cars per day although there had been a substantial increase in production this year compared to the previous year while the plant has seen the introduction of a number of new projects.
“We have seen the introduction of the Zhontong Climber 65 seater intercity bus, now named the Q Bus. We intend to introduce a few other bus models in the early part of 2016.
Tarik said the company has a number of projects that are about to take off which include the introduction of a variety of Mitsubishi models.
Meanwhile, Government is finalising a motor industry policy that is specifically meant to address the importation of used cars and introduce incentives that might help attract investors into the local motor industry.
The cost of locally assembled brand new vehicles is considered punitive and locals have had to import vehicles from Japan, South Africa, China, Europe and the US. However, last year’s used car imports dropped to 24,4 percent a US$469 million from US$620 million a year earlier due to tough economic conditions. FinX
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