Sunday, October 09, 2011

Government’s budget-cut slows purchase of new cars

Toyota, the largest supplier of new cars in Uganda, is feeling the pinch of government’s resolve to cut-back it’s expenditure on items like motor vehicles, advertising and newspapers.

Mr Dino Bianchi, the managing director of Toyota Uganda, told Daily Monitor the budget cuts on the purchase of vehicles has affected sales because the government is the biggest buyer of new cars. “The decision is already hurting us. Of course, government is among our top buyers and a reduction in purchase affects us.”

In her 2011/2012 budget speech, the Finance minister Maria Kiwanuka said there was need to cut government expenditure on some sectors in order to improve government service delivery. Ms Kiwanuka proposed that the government would freeze the purchase of vehicles except for critical areas; including hospitals, police and security.

Other industries that were affected include hospitality and media. To cope with the freeze, Toyota has introduced initiatives to boost its sales by easing the cost of acquiring and servicing new cars. “We are however, making our cars more affordable to potential clients,” Mr Bianchi said.

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