The continuous depreciation of the Kwacha, the official currency of Zambia, is having a significant impact on various sectors of the country’s economy. One of the most affected sectors is the vehicle industry, which has witnessed a significant rise in the prices of motor vehicles due to unstable exchange rates. The steady fall of the Kwacha against the United States dollar has led to high inflation, making even the cost of living in Zambia more expensive.
According to the monthly inflation report released by the Zambia Statistics Agency (ZAMSTATS), the price of Toyota Hilux motor vehicles has risen sharply from about K900,000 to around 1 million 3 hundred kwacha annually, representing an increase of about 45 percent year-on-year from November 2022 to November 2023. On a monthly basis, the price increased from about 1.2 million in October 2023 to about 1.3 million in November 2023, indicating a 9 percent increase.
Similarly, Toyota Corollas have witnessed an annual increase of 48 percent from 742, 000 to 1.1 million between November 2022 and November 2023. On a monthly basis, these vehicles increased from 972, 000 to 974,000, representing a 12 percent increase for the month of November.
commenting on this development Kelvin Kameta, spokesperson for car dealers, told the Zambian Business Times – ZBT, in an exclusive interview that the increase in prices was mainly due to the appreciation of the dollar against the Kwacha, which has also caused business sales to depreciate.
Kameta remarked that the cost of doing business is increasing, and the exchange rate is forcing them to increase motor vehicle prices. He noted that the dollar has been fluctuating upwards and has not been stable for quite some time.
He further explained that the landing cost of motor vehicles is going up, forcing prices up, thereby affecting customers. He highlighted that they do not order these vehicles in Kwacha but in dollars. Therefore, whenever the dollar goes up, they are hit by the increase in the vehicle industry.
Kameta said the business has been tough in the last quarter of 2023 as compared to the previous three quarters calling on the Zambian government to work towards stabilizing the exchange rate to ensure proper planning and good business in the industry.
He explained that the current situation makes it difficult to plan, and customers wait for the dollar to go down before buying vehicles.
