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FNB Caves in On Second-Hand Imports(AllAfrica.com English Via Thomson Dialog NewsEdge)Apr 21, 2006 (Mmegi/The Reporter/All Africa Global Media via COMTEX) --"Really! So they have been hammered until they were forced to do that," Dr Julius Weche, a retired veterinarian said upon learning that First National Bank Botswana has now decided to fund the buying of second hand cars from Japan and Singapore. A few months ago, it was taboo to expect any bank to even listen to a request for finance to buy these cars - commonly referred to as difong kong. In fact, before then, owners of these cars had a different dilemma - this time with insurers who refused to recognise the cars and offer insurance packages. After some initial hesitation, the insurance industry is now cashing in on this growing market and now the banking industry is joining in. "The banks have been saying all sorts of things about these cars and one manager had the guts to tell me that these were stolen cars. I asked him "if these cars are stolen why are the police not doing anything about it?" asked Weche. Weche drives an old Mercedes Benz from South Africa but now his dream of buying the pajero he always wanted could come true - as there is nothing about the cars being too risky or stolen. "That's good news, when I wanted to finance a pajero they told me they were not interested," he recalled. Weche said that whi le these cars may not meet environmental standards in their own countries, in Africa they were still in good condition and added that most of them were superior to South African cars. Wee Chen, owner of Safe Motors and one of those approved by FNB dealers who import and service second hand motor vehicles reasoned that banks need to do business while people want cars "so they both benefit." "Cars are like tools, if people don't have cars, it's like they don't have any feet," he said. The reality is dealers in imported cars are riding the crest but those dealing in local cars are having a bad time with most reporting up to 40 percent fall in sales figures. According to figures from the Registration and Licensing Division at the Department of Road Transport and Safety, car imports rose from 781 in 2001 to 10,631 at the end of 2005 with Toyota accounting for over 50 percent of the sales. In the same year, there was a significant number of luxury cars such as Mercedes Benz (95), BMW (124) and Land Rover (38) imported into the country further fuelling fears that if the trend continues, many of the local dealers may have to close shop. But while this scenario could have been expected to help bring the price of local cars, in particular new ones down, this has not been the case and dealers do not see this happening. Jim MacDonald, managing director at Lion Motors, Peugeot dealers said while 2005 was a bad year for new cars that would not bring prices down. Instead, he said, this had only made the market for new cars smaller estimating that the figures for new cars had fallen from a high of about 6,500 cars to 4,500. "The ex-factory price is not negotiable," he said, but pointed out that the resale value of local cars had gone down because such cars had to be sold back into the market where they have to compete with the second hand Japanese/Singapore ones. "The effect is on everybody, not just the dealers but individuals as well," he said but stressed t hat imported cars were a risky purchase because they did not have warranty or parts. MacDonald argued that Botswana was a small market and in any case it is a member of the Southern African Customs Union of, which South Africa is a member. The latter is the number one car manufacturer in Africa and has banned the importation of these cars into its market to protect its own vehicle industry. "Some of these prices are determined globally, you can't decide," said another commentator adding that the demand for new cars had slowed down. He argued that the advent of imports had turned a lot of people's dreams to drive cars into a reality. Other commercial banks have not yet followed FNB but are benefiting indirectly because most clients get personal loans from them to buy the imports. Economic analysts have said people are hampered by low disposable income hence they resorted to logic, which makes economic sense to purchase a cheaper car and save. Local dealers admitted they were in the doldrums but there was nothing they could do about it - talk about market forces and their efforts to lobby government to do something against the importation of these cars have not borne fruit either. Andrew Ngwane argued that the imports were killing the local market and called for them to be shut out but Weche summed it up thus: "We as a country are not obliged to support South Africa, we are not a state of South Africa, we should be supporting ourselves." |