Lovemore Chikova, China -Africa Focus
The unveiling of a partnership between Willowvale Motor Industries (WMI) and Beijing Beijing Automobile International Corporation (BAIC) in Harare recently signifies the progressive relations between Zimbabwe and China.
The partnership is important in that it is part of the mega deals signed between President Mugabe and his Chinese counterpart, President Xi Jinping, in December 2015. One by one, the mega deals signed with the Asian economic giant are coming to fruition.
WMI has almost been dead since 2012 when a deal with Mazda in which it was assembling knocked down kits imported from Japan expired. Since that time, the car assembler has ben finding it difficult to get back on its feet.
But now, it is expected to surpass its previous production levels in the next few years, thanks to the deal with the Chinese. What is also massive about this collaboration is that it will put WMI in a strategic position to export the assembled vehicles to the whole of SADC, and evnetually throughout the continent.
This will earn Zimbabwe the much needed foreign currency and help revive other industries related to car manufacturing. In fact, the company envisages that by next year, it will be export the vehicles it produces to the regional countries.
The deal, which will see WMI manufacturing double- and single-cab vehicles called Grand Tiger, is a good example of the win-win cooperation that exists between Zimbabwe and China. The revival of WMI means the creation of employment for thousands of job-seekers, some who had been made redundant by the non-production of cars at the factory.
There will be technological transfer to the Zimbabwean motor industry and local workers will benefit through retraining and alignment of their skills to the demands of the modern car manufacturing industry.
More importantly, it’s a sign that Chinese companies are casting a vote of confidence in Zimbabwe. WMI and BAIC formed a joint venture partnership, BEIQI Zimbabwe, that will spearhead the car assembling project and help cement relations between the two countries.
The automotive industry in Zimbabwe will never be the same again, as the revival of WMI is a significant breath of fresh air into the sector. The fact that this year alone the project is expected to generate at least $1,3 million in tax revenue for Government shows its importance to national economic revival.
The project is just one of those China is implementing in Zimbabwe under the mega deals signed between President Mugabe and President Xi. The Victoria Falls International Airport, built by China Jiangsu International and commissioned in November last year, stands out as a pointer to the progressive cooperation.
Designs for the new Parliament Building have already been finalised and work is about to start in Mt Hampden, where it will be sited. Inspection work for the Harare Pharmaceutical Warehouse project has been finished and is ready to take off.
Sinohydro, the Chinese firm working on the Kariba South Hydropower Station, says it expects major works to have been completed by the end of this year, with one generator being put on line by then. In the meantime, the China Export and Import Bank is heading towards the financial closure of the expansion of Hwange Thermal Power Station.
Sinohydro is also working on the Hwange expansion project. The TelOne communication project, which will revolutionalise the telecommunications industry in Zimbabwe, has been progressing smoothly. NetOne last year signed a massive agreement with Huawei of China that will also see the telecommunications industry turning to the more effective latest technologies.
There is no doubt that Zimbabwe has over the years become an attractive destination for investment from China and is poised to become one of the fastest growing countries on the continent as a result. It is expected that in the next five years, the outward investment of China to Africa will amount to more than $600 billion and Zimbabwe is expected to have its fair share of the cake.
This is evidenced by recent visits to the country by Chinese entrepreneurs on business investigation tours, scouting for good opportunities for investment, especially in agriculture and manufacturing. It is deals such as the one at WMI that will give Zimbabwe a competitive advantage in the use of technology in the industry.
There is no doubt that WMI will generate the much needed foreign currency when it starts exporting the Grand Tiger to regional countries. Everyone now hopes that BEIQI Zimbabwe will move from sKD production to completely knocked down (cKD) production and possibly venture into local manufacturing of vehicle components.
This will fulfil the objectives of the African Union’s Agenda 2063, which are premised on ensuring an industrialisation of the continent by that year. The SADC Industrialisation Strategy and Roadmap also emphasises on the modernisation of economies.
It is also important that Government is working on the Motor Industry Development Policy Framework expected to spearhead the revival of the motor industry sector.
BAIC Group is the largest car manufacturer in Beijing, with annual sales of nearly $60 billion. lt is also ranked 160th in the Fortune 500. BAIC was founded in 1958 and is one of the top four largest automobile enterprises in China. It is the largest state-owned industrial enterprise group in Beijing, with 130 000 employees.
The firm covers all the products in automotive industry, such as saloon cars, off-road vehicles, commercial vehicles and new energy vehicles. It has established a completed industrial chain, including parts manufacturing, automobile service and trade, import and export and auto finance. In Zimbabwe, the firm will find the foundation of the automotive industry comparatively complete and would not invest much in the preliminary works.
In cooperating with Zimbabwe, BAIC is following the guidance of “One Belt and One Road” from the Chinese government, which offers strategies and opportunities for mutual understanding. In the Beiqi Zimbabwe (Pvt) Ltd joint venture, BAIC, as the holding company, has 51 percent of shares and WMI has 49 percent of shares.
The joint venture will be in charge of import of whole vehicles, KD parts and components and fixture, distribution products and services, finance management and daily operations. The distribution products include pick-up, SUV and passenger cars and will cover the entire automobile market in Zimbabwe.
According to projections, the three-year project plan will be producing 1 500 units per year in the third year and from the second year, it will start export to other Southern African countries.