The Chinese automobile manufacturer Foton Motor Company is increasing its foothold in East Africa by constructing a truck assembly plant in Tanzania. The strategy of the corporation to construct the plant is in line with the government's objectives for the fifth phase of the country's industrialization.
The national ideal has been advanced under President John Magufuli's tenure as president, which is coming to a close soon. The government must prioritize the manufacturing industry to meet its objective of transitioning the economy to one with a middle income by 2025. After giving the country's goal of 2025 some additional consideration, many international investors are currently searching for business opportunities. To boost domestic industry while simultaneously promoting domestic and international commerce and investment.
The Chief Executive Officer has exerted great work in this endeavor. To fulfill the requirements of the regional market. Foton constructed an assembly plant in Kenya this year to provide improved service to the African market. The company has long-term goals of expanding its operations to include providing services to the transportation sector and providing residents of the area with access to many new career opportunities.
The company's mission is to find a solution to the common unemployment problem. The expansion plan would make it possible for auto dealerships to purchase vehicles at a lesser cost than they would be able to if they were imported. This will be the case if the dealerships buy domestically produced vehicles. In addition, replacement parts that are not prohibitively expensive will be easily accessible.
Pursuing a share of that lucrative market has motivated automobile manufacturers to continue expanding their operations into East Africa. The only significant competitor it has to its manufacturing hegemony is Toyota, the single greatest investment in the sector. After successfully penetrating the market in Rwanda, the German automobile manufacturer Volkswagen is now expanding its operations into the Ethiopian market.
The previous year, Tanzania implemented tax reductions as a business incentive measure to attract further investment in the automotive sector. As a result, the Finance Bill of 2018 stipulated that the corporate tax rate for a new facility constructed for the assembly of motor vehicles or tractors would be 10%, a drop of 20% from the previous rate of 30%. This would be a reduction of ten percentage points.
