The automotive industry is comprised of motor vehicles namely passenger and commercial vehicles, motorcycles, scooters; and, parts and components. Mozambique no longer assembles vehicle parts. The country recently hosted two small scale assembly lines for Hyundai Motors and Matchedje Motors (a partnership between Chinese Foday Auto and the Government of Mozambique), though both of these are no-longer operational. The local automotive market is now comprised of vehicle and parts sales (new and used), maintenance services and insurance providers. Mozambique is still a small market with around 40,000 units sold annually of which 50% are register in Maputo Province. Most vehicles sold are used and/or refurbished from Japan. Only 10% of sales are new vehicles.
Chevrolet, Ford and Jeep are the only U.S. brand with local dealers, offering sales, servicing and spare parts.
Summary
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Left-hand drive vehicle systems are no longer permitted to be imported in to Mozambique. This is the most crucial impediments for U.S. made vehicle exports. Mozambique does not have specific local content requirements for car imports. However, Mozambique is a SADC country and SADC has trade agreements that favor imports from member states.
Market Entry & Barriers
The Mozambican automotive sector experienced its first slump in 2016, this downturn is due largely to massive depreciation of the local currency against the dollar making imports more expensive. Since 2018, demand has slowly been rising due to economic recovery. The Government of Mozambique has implemented a slight reduction in import taxes for new vehicles, but Increased taxes for second hand vehicles older than five years. Competition for new vehicles is increasing, and most brands are setting up sales, service and spares service centers. Sales of new and used vehicles are expected to continue rising as middle and upper class continue to grow.
Reconditioned cars are refurbished used cars imported from overseas (only from other right-hand drive markets like UK and Japan), and sold via parallel importers. In Mozambique, regulations require imports be no older than five years old. Not having the manufacturer’s warranty and having control labels instructions being in a foreign language, most buyers are willing to overlook such inconveniences for a cheaper price. It also common for Mozambicans living in the south of the country to purchase vehicles registered in south Africa for a cheaper price. These vehicles are free to circulate in Mozambique for 30 days at the time until they are required to make a border crossing to reset their 30 days.
Market Trends & Demand
mozambique