CFAO launches Sh120 million assembly line in Mombasa


President William Ruto is taken on a tour of the an assembly line by CFAO Motors Kenya MD Arvinder Reel during the Launch of Toyota Fortuner local assembly line at Associated Vehicle Assembler in Miritini in Mombasa County on July 29, 2023.

Photo credit: Wachira Mwangi I Nation Media Group

CFAO Motors Kenya launched a Sh120 million, first locally assembled passenger sports utility vehicle (SUV), assembly line at the Associated Vehicle Assemblers (AVA) in Mombasa County.

Speaking during the Launch of the Toyota Fortuner assembly line in Miritini, President William Ruto said this is a vote of confidence in Kenya is a worthwhile economy.

The President noted that the investment into the assembly line will enable the creation of 100 direct and 500 indirect jobs.

President Ruto expressed the government's commitment to expand and increase the contribution of manufacturing of GDP of the county by 2030.

"Among the interventions is what AVA is doing- creating additional jobs additional income. Kenya has opportunities in many sectors including the automotive industry

Your action and value in investing in Kenya at a time we looking forward to transform the economy. You have my support and the people of Kenya," the President said as he echoed his support to the project.

The President acknowledged the training and knowledge transfer program by CFao Motors

"I was informed that you are looking at increasing local content from 20- 30 percent. It is our believe that as we engage in this sector, more capacity will be built and we increase the levels of manufacture so that we can manufacture this vehicle from scratch," he said.

Local assemblers

Dr Ruto added that the government is planning to acquire 5,400 motor vehicles for the security agencies especially from local assemblers.

"We are going to insist that only those vehicles being assembled at level 3, will qualify to be supplied by our local manufacturers. As we buy vehicle for the government, we will insist that they are locally manufactured or assembled. We are not going to buy any vehicles that have come to the county without the input of Kenyans.

The industry composition is below the required potential, we have only 1 original equipment manufacturers, five motor vehicle assemblers and 32 registered motor vehicle assemblers with 14 are specialized in electric motor vehicles," he said.

He urged the management to partner with the government to move away from motor vehicles currently being assembled in Kenya and look at what additional incentive that can be input to manufacture electric vehicles locally.

The President said there is tremendous potential and opportunity for the country to manufacture e-vehicles, buses locally as the output was still very low.

"Many assemblers only have a combined annual capacity of 46,000 vehicles and 300, 000 motorcycles.

However all the assemblers are operating at between 20-30 percent capacity. We need to reverse this and tap into full potential of all the manufacturers in Kenya," Mr Ruto explained.

He noted that the government has put in place a policy and automotive standards but it has delayed due to various emerging issues.

He added that the Government is implementing the local content and the buy Kenya Build Kenya policy, to promote uptake of locally manufactured products in public sector.

Cfao motors seeks to closely work with local parts manufacturers to bolster capacity building and assist them achieve global standards by upskilling them through technology transfer and technical know-how.

The addition of the Fortuner assembly line adds to CFAO Motors Kenya’s locally assembled vehicles portfolio, especially after the recent merger with DT Dobie.

CFAO Motors now locally assembles the Land Cruiser LC79 series, the Hino trucks and buses, the Hilux single and double cab pickups, and the Toyota Hiace (mini-bus) at the Associated Vehicle Assemblers; and the Mercedes Benz trucks & buses, Hyundai trucks & Volkswagen passenger cars at the Kenya Vehicle Manufacturers assembly plant in Thika.

The Fortuner assembly line includes state-of-the-art assembly fixtures crucial for maintaining the highest quality standards during production.

The introduction of the Fortuner CKD assembly line signifies CFAO Motors’ ongoing commitment to the Government’s manifesto around manufacturing and the ‘Buy Kenya Build Kenya’ agenda.

Since locally assembled vehicles enjoy duty exemptions, CFAO Motors will be in a position to offer the new Fortuner 2023 at a fairly competitive price compared to fully imported units SUVs.

CFAO Motors Kenya Managing Director, Arvinder Reel, lauded the government’s efforts to encourage the growth of the local manufacturing sector, citing the National Automotive Policy as an enabler to the availability of more locally assembled vehicles in the country.

“The anticipated operationalization of the National Automotive Policy will, without doubt, push the automotive industry into exponential growth in locally assembled vehicles. These vehicles not only offer more job opportunities and increased local components manufacturing capacity but give Kenyans an opportunity to own brand new vehicles more affordably," Mr Reel said.

CFAO Motors has in place a carbon-neutral strategy of reducing greenhouse gas emissions by introducing environmentally friendly hybrid vehicles.

Prime Cabinet Secretary Musalia Mudavadi who was also in attendance acknowledged the strides made by AVA and Toyota Cfao adding that Kenya-Japan partnership continues to grow.

"Kenya is very close to the people of Japan. Confidence of Kenya isn’t shaken that is why we are here launching the new line," the Prime Secretary said.

Trade and Investment Cabinet Secretary Moses Kuria echoed the government plan to start 100 per cent assembling of big trucks by the end of the year.