BY MOSES SSERWANGA
As
the country’s vehicles production flagship, Kiira Motors ,continues to champion
mission cars made in Uganda , public interest has increased with many
commentators coming on board.
It
is a mixed bag with some commentaries lacking facts while others are
coached in political rhetoric to advance selfish interests geared at
sabotaging a government program of strategic economic importance .
The
latest to comment on Uganda’s prospects to produce cars is the- old man around
town, John Nagenda, who in his latest article questioned government’s decision
to invest in the automotive industry .In his typical rhetoric style he did not
provide any researched data to back up his argument.
However
, available data shows that all the top economies of the world have budding automotive industries . From
America 's automobile heartbeat in Michigan (General Motors ) , China’s Shanghai General Motors, Malaysia’s
Proton, Japan’ s Toyota , South Korea’s Hyundai to South Africa 's Honda,
the automotive sector has played a leading role in the development of these
countries respective economies .
It
is not a surprise therefore , that for all the top world biggest economies in 2019
to 2020 which include the USA, China,
Japan Germany, United Kingdom, India , France and South Africa ,governments
have invested heavily and continue to support their automotive industries . Governments
in other relatively small economies like Vietnam, Ethiopia, Nigeria, Morocco,
Algeria, Turkey are funding their car producers.
In Asia, governments of major vehicle production
countries such as China, South Korea, Malaysia, and Japan have played a virtual
role to ensure that their automotive industries, do not only grow and survive
the global economic turbulences but that such industries are at the center of
growth for these now dubbed economic tigers.
In these countries, several policy
interventions have been engineered from provision of affordable financing, to
infrastructure development, provision of investment incentives, encouragement
on innovation at all level of high learning and industry development to local
content development programs.
When the global economy mired in an economic
slowdown with global vehicle production dropping more than 10 million units in
2009 from a record high of over 72 million units built in 2007, governments put
in place radical economic stimulus packages that boosted their failing
automotive industries. Again these were government led interventions to support
and prevent their automotive industries, which are the engines of their
respective economies from collapsing.
It was not long before the positive impact
of such initiatives was seen. A clear example is that of China, following the
stimulus package from the Chinese government, China’s auto industry registered
a rapid growth in 2009 and 2010. In 2009, China produced more than 13.6 million
vehicles, overtaking USA to be the world’s largest car producer. In 2010, the
growth momentum continued, bringing China’s vehicle production to nearly 18.3
million units, almost doubling its 2008 production registered before the global
economic meltdown.
The Chinese government had opened up its
auto market to international companies but only with the understanding that its
domestic manufacturers would not be able to compete with the more sophisticated
and experienced foreign rivals. Foreign automakers were allowed to enter the
Chinese market only through joint ventures with local partners, oftentimes
state-owned companies (SOEs)just like Kiira Motors , each with no more than 50%
controlled by a major foreign nameplate automotive manufacturer.
Some of these joint ventures have seen VW joining
forces with Shanghai Automotive Industry Corporation (SAIC) and First
Automotive Works Corporation (FAW). SAIC is also a joint venture partner of GM,
while FAW is also a partner of Toyota. Honda and PSA Peugeot Citroen have both
formed partnerships with Dongfeng Motor Corporation.
It is the same story with Malaysia which
used a state led auto development approach by building national champions (read
Kiira Motors) before eventually
commercializing and privatizing.
All this shows that the automotive industry which
is going to be a major force for economic emancipation in the East Africa
region and on the African continent will require infant industry state funding
and policy interventions for
sustainability and ultimately competiveness.
And for the record, Uganda government ‘s
funding of the state owned Kiira Motors has not come out of the blue. Due
diligence has been made over the years and a blue print prepared and presented
making the case that investing in the automotive sector is a viable venture of
national strategic nature.
The Uganda government should not be cowed by
the nay-sayers who are quick to praise our neighbours for carrying out similar
investments while criticizing anything that is Ugandan.
The writer is a Media and Communications
Consultant /Trainer and Advocate of the High Court of Uganda
msserwanga@gmail.com
