PROGRAMME (BSPLT) PURCHASING, LOGISTICS AND TRANSPORT

COURSE FLEET MANAGEMENT

CODE CUPLT 408
YEAR 2014
GROUP ASSIGNMENT
NAME SURNAMEREG NUMBER
AGATHA ZVAREVASHE C1111178Z
FREDRICK ZINDOGA C108773K
THERESA ZUNGUMURO C1111804E
GODFREY TIZORA CO97795X
KELVIN T NJOVANA C1111404V
CHARLENE NTINI C1111773W
CLEVER TSARWE C1111682X
NATASHA NYAKODZWE C1010526Q
ANNAH NYANDORO C109336X
BLESSING SHAVA C1111447R
LIERY TIKI C1111575F
CATHRINE ZIMUNYA C1111210J
SHADAYA KUTENDA C1110878Y
GODWIN ZIVENGWA C108114T
CHARLES SITHOLE C1111410B
MICHO K MUPONDA C1111307P
DERECK PARADZA C1111707Z
JACOB WOYO C1111143L
TAWANDA TAGUTANADZO C1111181C
PHILLIP TSANGU C111O933H
SIWELAH MUNYARADZI C1110927B
PHILLIP SHAYA C1111257K
NGONIDZSHE MUTANGA C1111471S
NOMALANGA TODHLANA C1111782F
MAXWELL SAMHUNGU C1110902Z
KENNETH RUBETE C1111925L
OLIATH SIACHEMA C109204D
MISHECK SIYAMANYANGA C1110906D
SHECKMORE NDLOVU C1110980J
PANGANAI KASSIM C10994E
TAPIWA C SHEKEDE C1110896S
THEOBALD M SHUMBA C1111450V
TAFADZWA NDLOVU C1112149E












QUESTION: The ban of importation of second hand vehicles (vehicles more than five years
old) by government is a good move. Discuss. (25)

Introduction
Inasmuch as Zimbabwe is blooming in most of the sectors of the economy such as tourism and
retail industry, however, most of its raw materials, work-in-progress and finished products are
being imported from countries like China (clothes and electrical gadgets), Japan (motor
vehicles), and South Africa (groceries). These imports are posing tragedy effects on the growth
of the economy and welfare of the Zimbabwean citizens. In this same perspective, the ban of
importation of 2
nd
hand vehicles by the government is a good move as it protects local industries,
and the environment at large.
Liquidity
Most of the cash is being channelled to outside countries towards the importation of 2
nd
hand
vehicles (above 5 years) thus leaving the country in a liquidity crunch. Commercially the country
is recording a relatively large number of money transfers in respond to cheap 2
nd
hand vehicles
from Japan thereby causing a liquidity crunch in the country. The move by the government
towards the ban of importation of 2
nd
hand vehicles (with 5years or more) is beneficial to
corporation or fleet haulage companies such as Unifrieght services. For every company in the
transport industry, vehicle financing and acquisition are the major functions to consider when
managing the fleet especially in terms of fuel, maintenance costs. Within fleet management
organizations, vehicle financing involve borrowing cash from financial institutions like banks.
As a result of the liquidity problems that the banks are experiencing, most fleet management
organisation has applauded the government of this move so as to keep money in circulation
hence fleet maintenance and management cannot be affected by lack of funds. Improper vehicle
financing has resulted in many fleet management organisations shut as a result of deficiencies in
their productivity and performance hence the move towards the ban of importation of 2
nd
hand
vehicles sets a security measure to protect local fleet companies from liquidity crunch.
Attract investors
For investors to enter a market, mainly it depends on government policies in each and every
sector of the economy. Banning of importation of 2
nd
hand vehicles (5 years and above) is of
greater importance to the development and growth of our Zimbabwean economy as it lures
potential investors operating in the motor industry. The availability of potential investors in
motor industry helps the government with taxes and employment creation for the betterment of
its citizens and also fleet management companies by efficient and durable fleet which can
increase productivity and performance. In support of the government move towards the ban of
importation of 2
nd
hand vehicles (5 years and more), car imports have a negative impact on the
Gross Domestic Product (GDP) of the country as it yields no production within the economy
thereby resulting in the collapse of the economy. Instead potential investors increase competitive
advantage of the Zimbabwean market and also increase the standards of living of the citizens.
This also helps the country to maintain its balance of payment.
In this context, investors would invest in the local market while distributing new affordable and
efficient vehicles. For example Toyota South Africa (Pty) Ltd sells their vehicles on premium
bases so as to meet customer needs. This would also help fleet operators as acquisition of
vehicles would be based on a win-win agreement by potential investors.
Protecting local industry
The ban of importation of 2
nd
hand vehicles (5 years and more) by the government is a good
move as it promote and protect local motor industries such as Willowvale Mazda Motor
Corporation and Quest Motor Corporation to name a few. Above listed companies are suffering
from cheap imports leaving them with low bargaining power and small market share which
basically cannot recoup their production expenses. The move by the government creates a
platform for local industry to be competitive and productive as attention will be on their side.
The welfare of Zimbabwean citizens is improved as a result of equitable standards of living. The
affirmation of the local industry creates jobs thus reducing the brain drain effect that the country
is suffering from. If the local industry is protected means that fleet management organisations are
now benefitting from local specialist in fleet management through total control, planning and
monitoring of fleets especially in vehicle replacement and disposal.
In 2011, President R.G .Mugabe gave a directive that all government institutions should buy
vehicles locally in order to support the Buy Zimbabwe initiative and also to support the local
industry hence reducing cash outflow. In a circular published in the government gazette of 11
TH

October 2002, then secretary to the President and Cabinet, Charles Utete, declared, It is hereby
notified that in terms of Section 20 of the Procurement Act Chapter (22:14) , the president has
given the following directions to State Procurement Board to conceive the nations scarce
foreign currency resources and promote development of domestic automotive industry and
provides support thereto at a time of considerable challenge for that industry.
Fuel efficiency
Since motor vehicles are manufactured in generations, latest technology in terms of fuel
efficiency will be within the latest vehicles. Therefore it is important for fleet managers to
acquire the latest, durable motor vehicles so as to have a greater conversion ratio (litre per
kilometre ratio). For example movement from petrol carburettor to fuel injection and from heater
system to direct injection and from direct injection to injector pump to common rail system and
the Teco system on Haulage tucks. The move by the government towards the ban of importation
of 2
nd
hand vehicles helps fleet management in improving its fleet efficiency and also to be
environmental conscious as this new advancement in technology reduces the amount of carbon
gases emitted into the atmosphere. Fleet management organisations also benefit from improved
fuel efficiency as it will be channelizing its resources towards its core functions. And also these
2
nd
hand vehicles (5 years and more) are much less fuel efficient, making them more expensive
for fleet management organisations to run. As a result of its inefficiency, their ban by the
government is a good move because so many companies are now seeing running a fleet of 2
nd

hand vehicles as a cost to the organisation. This normally results in low productivity and poor
service provision hence no or little profit generated.
Anti-dumping
According to the National Trade Policy (2012-2016), government will capacitate and strengthen
the investigating authority for it to be able to establish the existence of unfair trade practices
caused by dumping and subsidies imports, with a view to initiating anti-dumping action as well
as instituting counterveiling measures such as Buy Zimbabwe initiative and rules of origin. As
recommended in the National Trade Policy, anti- dumping measure protects the environment in
terms of safety and health management.
The high rate of technological advancement in Asian countries like Japan resulted in the
dumping of old second hand and obsolete vehicles to developing countries of Africa like
Zimbabwe. In addition, these African countries do not have recycling plants which can allow
them to recycle these vehicles as a result many waste from these imported vehicles are lying
dormant along roads, garages, and homes and overloaded in car breakers premises hence the
government policy of banning the importation of these vehicles to a greater extent is a positive
move.
Air pollution
On the 24
th
of April 2014, Harare News expresses that the proliferation of 2
nd
hand vehicles in
Harare is a ticking environmental time bomb. Dollarization brought about financial stability in
many households, enabling the purchase of vehicles which were previously out of reach. While
making Harare more mobile, the problem is that 2
nd
hand vehicles (5 years and more) cause
much higher air pollution than new durable cars. The move by the government towards the ban
of importation of these vehicles is a good move as they have older, less efficient engines with
dated technology manufactured under less strict industry standards. The exponential increase of
these vehicles on the citys streets has caused carbon dioxide emissions to rise. Not only do these
vehicles emit higher amounts of carbon dioxide, a green house gas that causes climate change,
but they also emit higher amounts of noxious gases like carbon monoxide, sulphur dioxide and
nitrogen oxides.
Furthermore, second hand vehicles results in hydrological system disruption whereby these
emissions will result in acidic rainfall which is harmful to the environment and agricultural
activities thereby hindering production output. These emissions has a great impact on the health
of the Zimbabwean citizens as TB, eyesight problems will accrue thus causing a weak labour
force for the country to run effectively so the move by the government is good as it protects its
citizens from such tragedy pollution.
Environmental protection
The move by the government towards the ban of importation of 2
nd
hand vehicles is well
confirmed to be a good move as it protects the environment thus the flora and fauna. Under fleet
management functions, fleet disposal is one of the greatest activities that need special attention
so as to keep the environment and all that is in it safe. As a fleet manager, it is vital to plan on
how best obsolete vehicles are disposed. Japan is selling these vehicles at a cheap, affordable
price that almost 30% of the Zimbabwean population has acquired these 2
nd
hand vehicles (5
years and above) which results in many of them being disposed because they lack proper service
and maintenance. And also it is costly to fetch for replacement parts from Japan hence many of
them remain idle or they are disposed.
Disposing of the associated metal, rubber and waste fluids is a huge environmental issue. There
are currently no proper treatment facilities in Harare that have the equipment required to recycle
what can be recovered and safely dispose of the many pollutants associated with 2
nd
hand
vehicles. Most vehicles end up in driveways, in scrap yards or in car breaker premises, leaching
heavy metals and toxins into the ground, or they rust by the side of the road where they have
been illegally abandoned. At the same time, tonnes of oil and brake fluid are poured down drains
in a city that depends on recycling its own water hence harm of the aquatic life and also to the
citizens as this water will be poorly treated.
On a more ominous side, there have been reports of vehicles that were contaminated by
radioactive fallout from the Fukushima nuclear disaster that occurred in Japan in 2011, being
exported to Africa and do not forget that Zimbabwe is in Africa. African policy specialist and
journalist, Chika Ezeanya, reported from Nigeria: Cars having up to twenty times the
permissible level of radiation have found their way to African countries where several
governments are clueless or unconcerned about such health risks. There is no inspection for
contamination at Zimbabwes borders and this leaves the general populace at the risk of
contracting different forms of cancer from the exposure to radiation.
Accidental risks.
In first world countries, most car owners do not usually maintain their vehicles because it is
costly and they require these vehicles as brand new. First world have vehicle policies which
prohibit the use of vehicles more than 5 years from the date of manufacturer on their roads for
example in Japan. So most of these cars are dumped into the African market, upon receipt of
these vehicles, car owners eventually use them without conducting a special service on them or
even changing the tyres which normally do not suit the Zimbabwean climate. Many cases of road
accidents are a result of lack of maintenance for example suspension failure like ball-joint
dislocation which can lead to vehicle overturning. Current technologies on vehicles have
contributed to reduction in number of road accidents. Latest vehicle have cell phone answering
mechanism such as Bluetooth whereby a driver a call using hands free compared to those old
vehicles. So the move by the government is vital as it reduces accidents frequency.
Road load tension
Road load tension refers to the amount of vehicles using or passing through a certain highway in
relation to quantity loaded. More roads of Zimbabwe are not that good hence increase in the flow
of vehicles passing through the road destroys the condition of roads. The greater number of cars
using a particular road, the greater, and the degree of deterioration of that road will be. For
example Harare-Masvingo-Beitbridge road is experiencing a heavy road load tension as a result
it records a largest number of potholes and dilapidations. It is costly for the government to
maintain and repair this road as the Group Five is charging $1million USD for the construction
of a kilometre. Its more risky to drive a second hand bulk truck carrying the actual load as the
performance of the vehicle will not be really perfect for a horse to pull. However, Zimbabwe
depends on importation of products and these vehicles from outside, therefore since we do not
have local producer to replace them it will difficulty for transport operators to provide sufficient
services at lower cost. Also the government has to embark on dualisation of core highways
linking Harare with South Africa, Zambia, Botswana and Mozambique

However the move by the government towards the banning of 2
nd
hand vehicles (5 years and
more) is a predicament gorge to fall in as the Zimbabwean current situation shuns any
development or growth of an industry activity. As a result of economic hardships that the country
is facing, motor industries are operating below its expected capacity. The governments revenue
base is being growing hence creating more jobs on the market so the ban of 2
nd
hand vehicles is
unacceptable.
Loss of revenue
The ban of the importation of 2
nd
hand vehicles by the government is not a good move as it leads
to loss of revenue that is generated from customs duty payment and surtax charged on 2
nd
hand
vehicles with 5 years and more. ZIMRA is now being viewed as the most efficient revenue
generating parastatal as it is collecting much revenue from vehicles imports especially on its
Beitbridge, Chirundu border post. This means that the government will lose revenue that is from
the duties and surtax paid on their entry. Vehicle Inspection Department (VID) also lose revenue
as the number of vehicles being registered will be reduced thereby dissatisfying their defined
objectives.
Lack of capacity
In Zimbabwe, Willowvale Mazda Motor Company is well known of assembling motor vehicles
but it is lacking production capacity and also it is offering its durable vehicles at a higher price
which is unaffordable to the greater populace of Zimbabwe. Its capacity has been reduced by
higher cost of production and also by the availability of cheap imports from Japan.
As a result of high growth in motor vehicle demand, motor industries are now lacking quality,
adequate service provision which can meet the daily fluctuating demand.
Conclusion
The ban of importation of 2
nd
hand vehicles (5 years and more) by the government is a good
move. For a country like Zimbabwe to develop it needs financial security, environmental
security, economic security and indigenisation of local industry for it to sustain its competitive
advantage on the world market.










References
Harare News, 24
th
April 2014
National Trade Policy, (2012-2016)