Expenditure cut to affect new car purchases—dealer

Imperial Motors Limited Malawi, a subsidiary of South African-based Imperial Holdings Limited, has said the expected 1.7 percent reduction in government expenditure will impact on new vehicle purchases in the industry.

In the Mid-Year Budget Review Statement presented a fortnight ago at Parliament in Lilongwe, Minister of Finance, Economic Planning and Development Goodall Gondwe said government will make fiscal adjustments in response to the loss of budget support, which will result in the fiscal plan being revised downward by K20 billion from K1.149 trillion to K1.129 trillion.

In an interview on Thursday on the sidelines of a customer cocktail, Imperial Motors Malawi managing director Jabulani Ndabambi said they are banking their hopes on other sectors of the economy as well as spare parts sales and vehicle servicing division to cover up for the expected loss.

He said: “Reduction in government expenditure will have an impact in terms of new purchases, but there is an existing fleet that we have to continue servicing. We would have to respect the priorities of government in terms of expenditure.

“But again, there are also other sectors of the economy that support us, including parastatals, non-governmental organisations and the private sector,” he said.

However, Ndabambi said that the reduction in donor funding has not had any impact yet on vehicle purchases.

He said Imperial Motors is also banking on the positive performance of the kwacha, which has been fluctuating in recent times.

“The currency has been quite stable, a development that helps us because we are a net importer of all our products and this has helped us to keep the costs down,” he said.

One of the clients for Imperial Motors, Jane Ndovi, hailed the company-client relationship which she said has made it easier for Imperial Motors to be the brand of people’s choice.