africa development Economy manufacturing Tanzania Trade

Chinese company Foton Motor to assemble trucks in Tanzania

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Tanzania’s automotive industry is winning foreign automakers’ deals as it seeks for solutions in the transport sector

 

Chinese automobile maker. Foton Motor Company is set to establish a truck assembling plant in Tanzania as it gears towards extending its foray in the East Africa region.

The firm’s strategy to set up the facility is in line with the country’s fifth phase government target’s on industrialization. President John Magufuli has pushed the dream in the country as he looks to make a significant impact before his time come to an end.

Manufacturing is a prioritized sector that has high potential to drive the country’s dream of becoming a middle-income economy by 2025. The goal has spurred the interest of many foreign investors to seek business opportunities. The Head of State has worked to establish a conducive environment for foreign businesses and support the local sector.

Foton launched its assembling facility in Kenya early this year to cater for the market demand in the country. The company envisages offering solutions in the transport sector to facilitate trade. The firm plans to eradicate the prevalent challenge of unemployment by creating job opportunities for the citizens.

The expansion plan will ensure car dealers acquire the trucks at an affordable price as compared to importing. Spare parts will be as well available at competitive prices.

Car automakers continue to venture in the African market as they look to have a share of the pie. Toyota is a major investor in the manufacturing industry and a potential competitor as well. German machine Volkswagen which recently entered the Rwandan market is extending its reach in Ethiopia.

Last year, Tanzania cut its taxes as a business incentive measure to attract more investments in the automotive industry. The Finance Bill of 2017 stated that “A corporation with a newly-established plant for assembling motor vehicles or tractors will receive a corporate tax rate of 10 percent” which will be a 20 percent reduction of the 30 percent corporate tax rate.

The government is adamant to produce brand new locally made vehicles as well as export to the neighboring countries. A similar strategy is undertaken by Uganda that seeks to phase out old cars and discourage car imports and support the local manufacturing sector.

Source: The Exchange

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