Move to shift local car assembly to faster lane excites industry

By Evans Ongwae

More vehicles on Kenyan roads now boast a local touch. And the number is expected to grow within the next five years once a proposed law to boost local assembly is enacted.

The government has made renewed efforts to revive the industry in line with the Big 4 Agenda. Manufacturing, under which local assembly falls, is one the four pillars expected to accelerate national development.

Of the vehicles that the country imports, a large variety comprise second hand models. They account for more than 85 percent of imported Fully Built Units (FBUs). This makes Kenya largely an importer of used vehicles.

The situation is set to change.

Early last year, the government drafted a bill meant to streamline and improve the fortunes of the motor industry. The proposed law outlines how the government plans to phase out the importation of second-hand vehicles by 2026.

The phased development of the local motor assembly industry represents an ambitious target. Only six years remain for the country to attain this goal.

The Draft National Automotive Policy crafted by the Ministry of Industrialisation represents a deliberate attempt to put the industry on the road to a bright future.

While unveiling a locally assembled Peugeot SUV at the Kenya Vehicle Manufacturers (KVM) plant in Thika last year, President Uhuru Kenyatta repeated his call to entities operating in Kenya to buy locally assembled vehicles and spare parts.

Three decades ago, Kenya hit a high of 13,000 locally assembled vehicles. But when the country opened the floodgates to used vehicle imports in the early 1990s, local assembly took a plunge.

The motor industry stakeholders have over the last decade been urging the government to encourage local assembly. The assemblers have repeatedly asked the government to fully support their industry or continue exporting jobs. They have been arguing that if the government does not adopt appropriate policies, vehicle assembly in the country will cease, leading to loss of jobs.

At one time, the Kenya Vehicle Manufacturer (KVM) management warned that unless certain measures were put in place, the country would become an importer of only fully built and more so, used vehicles.

For close to two decades, KVM was operating at 10 percent capacity and the then managing director David Percival feared that matters would worsen with the coming into force of the East African Customs Union as well as competition from Chinese vehicle exporters.

"We have been operating at 10 percent capacity since 1993 because the government gives low priority to Completely Knocked Down Kits (CKDs)," Mr Percival said a few years ago.