Economic slowdown hits automobile industry

By Kingsley Jassi:

Malawi’s automobile industry is feeling the effects of the economic slowdown, with vehicle dealers struggling to make sales despite estimates suggesting that the country imports about 1,000 vehicles every week.

One of the leading automobile companies, Cfao Malawi, has reportedly registered a 30 percent decline in car sales.

The increase in vehicle imports is believed to be largely driven by secondhand vehicles, which are increasingly visible along major roads, particularly in Lilongwe and Blantyre.

Despite the challenging economic environment, Cfao remains optimistic that the situation will improve.

The company is positioning itself for an anticipated economic recovery through a K24 billion investment in modern showrooms and service centres in Blantyre and Lilongwe.

The Lilongwe facility, which was officially unveiled on Thursday, represents an investment of K11 billion and has undergone extensive renovations, including the installation of modern equipment and the upgrading of its facilities.

Speaking during the unveiling ceremony, Cfao Malawi Managing Director Kennedy Kabaghe said the company remained confident that the current economic downturn would eventually give way to growth, creating increased demand for vehicles and related services.

Kabaghe said an improved economic environment would stimulate consumer spending and investor confidence, creating opportunities for businesses to expand their operations and services.

On the transition to electric vehicles (EVs), Cfao expressed concern over the lack of supporting infrastructure in Malawi, saying this was limiting the introduction of the vehicles onto the local market.

“EVs are indeed very important now for clean energy, but if you look around the country, there are no supporting facilities such as charging ports. Those with EVs have to charge them at home. Until we have charging ports, it is difficult for us to start supplying EVs,” he said.

Deputy Minister of Industrialisation Edgar Tembo challenged players in the automobile industry to explore opportunities for manufacturing vehicle spare parts locally, taking advantage of the country’s mineral resources.

Tembo said the government wanted to promote value addition, reduce dependence on imports and increase exports through local manufacturing.

“We, as a government, would like to ensure value addition of these minerals so that we promote import substitution and increase exports. We will be looking at the minerals we have to establish whether some vehicle spare parts can be manufactured locally, working together with the private sector,” he said.