Strong Kwacha excites Kitwe car dealers

MATHEWS KABAMBA

Kitwe

SOME used car importers have welcomed the continued appreciation of the Kwacha, saying the stronger local currency is restoring confidence in the motor vehicle market.
The Kwacha has been bullish against the United States dollar in recent weeks, trading around K17 to K18 per dollar. In separate interviews yesterday, car dealers said the strengthening Kwacha is reducing the cost of importing vehicles and spare parts, thereby easing pressure on their businesses.
Michael Phiri, an importer of used cars and tyres, said appreciation of the Kwacha has created a more predictable business environment for car importers.
“The exchange rate has a direct impact on our business because we order our vehicles in dollars. So, the stronger the Kwacha, the easier it becomes for us to operate. In the past weeks it has been a relief for us,” he said.
Mr Phiri said what will be critical is stability as this will encourage dealers to increase stock levels and offer more competitive prices to customers.
“What will be important is to ensure it strengthens further and remains stable for a long time so that we may be able to recoup some of the losses from the period it depreciated,” he said.
A Chingola-based car importer, Webster Chanda, said it will not be long before consumers begin to feel the impact.
“In moments of a weak Kwacha, most customers put off buying imported used cars, but with the current situation, where the Kwacha has gained, I believe more people will start ordering cars, and it means better business for us,” he said.
Peter Chileshe said the currency gains have come as a welcome development for vehicle importers, who had endured reduced sales and shrinking profit margins during times of exchange rate volatility.