This archive report was first published on 22 October 2019.
President Uhuru Kenyatta's remarks on Friday have sent a chill down the spines of vehicle importers, who are staring at bleak times ahead.
Speaking at the commissioning of the Sh1 billion Toyota Hilux pickup truck assembly line at Associated Vehicle Assemblers (AVA) in Miritini, Mombasa, last Friday, President Kenyatta reaffirmed his commitment to safeguarding local car assemblers against unfair competition.
He urged Industry, Trade and Cooperatives Cabinet Secretary Peter Munya to speed up the National Automotive Policy and promised to submit it to the Cabinet for approval within three weeks.
According to Mr Munya, Kenya spends Sh22 billion a year on used-car imports, with the vehicles incurring high costs in maintenance and export jobs.
The policy, which is expected to be implemented in the next three weeks, aims to cap the age of imports at five years by 2021, then three years and finally zero by 2024.
However, the Car Importers Association of Kenya (Ciak) has opposed the move, saying the car-importing business is an economic mainstay for over 2.5 million people.
“As a country, we should not cheat ourselves when it comes to manufacturing and assembling,” said Ciak chairman Peter Otieno.
“The person doing assembling of motor vehicles is not a manufacturer; this is just an assembler, meaning that the parts are made somewhere else and even the painting has been done,” he added.
Mr Otieno accused assemblers of banking on tax-free incentives to make a profit and challenged them to reveal where they source local content.
“Who are supplying them with nuts, brake pads, springs, locks, mats and such like things?” he asked.
“Everything used in those motor vehicles must support local industries by using local content,” he said.
According to data, Kenya imports about 7,600 second-hand vehicles per month while locally assembled units stand at 430.
Mr Otieno said Ciak imports between 120,000 and 130,000 vehicles per year.
