Kenyans will soon rely less on imported second-hand cars, with dealers in locally assembled vehicles promising to deliver new units for the same price as used imports.
Simba Colt group managing director Naresh Leekha noted that since the beginning of this year, Kenyans have been excited about getting zero-mileage cars with a five-year warranty.
“Kenyans have given us a good reception. We see a lot of uptake of locally assembled cars,” Mr Leekha told the Nation.Africa.
“In the new-vehicle segment, we have got more than 35 per cent of the market and we are looking at growing to 65 per cent in this financial year. It was good that we had the blessings of President Uhuru Kenyatta during the official launch.”
A buyer, he said, can pay as little as Sh29,000 monthly after depositing Sh100,000 to acquire a new Proton that sells for Sh1.1 million.
This is achievable once production of affordable locally assembled cars is optimised and the National Automotive Policy is adopted.
The new policy, adopted by the Cabinet earlier this year, is expected to restrict imports of second-hand vehicles and various spare parts in order to encourage Kenyans to buy locally made parts and accelerate the production of locally assembled vehicles.
The policy also targets challenges such as the lack of dedicated legal, institutional and regulatory frameworks, imports of parts by franchise holders instead of procuring from local parts manufacturers, and an influx of used vehicles.
Resolving these issues would make the domestic automotive industry more competitive.
Speaking during a tour of Associated Vehicle Assemblers (AVA) in Mombasa, Ruth Mwaniki, the vice-chair of the National Assembly’s Trade Committee, said the new policy will help create more jobs for young Kenyans.
“We see this is a big brand, creating a lot of jobs for our people and spurring economic growth. We have also seen they have a car assembled locally, the Proton, which has an affordable price equivalent to the imported ones,” she said.
“Kenya has a growing middle class who require a motor vehicle, which is becoming a necessity in most homes. If we have one that is affordable, we will not be exporting jobs by buying second-hand vehicles.”
Isuzu Motors East Africa CEO Rita Kavashe told the Nation that more investors are setting up shop in Kenya.
“The three plants - Toyota, Mitsubishi, Isuzu - were not producing pickups, but since last year, they started production,” Ms Kavashe said, adding that Simba Colt has already rolled out the Proton, an affordable unit.
She said that the auto sector is demonstrating the capacity of Kenya to transition from being highly reliant on second-hand cars to newer vehicles.
“A new vehicle has a life of up to 10 years and an investor enjoys a better life than that of an already used car,” she said.
“With the level of investment already in place, we have the requisite capacity, technology and manpower to take this industry forward. The sector is a big indicator, supporter and enabler of economic growth and development.”
Toyota, Mitsubishi and Isuzu produce about 34,000 vehicles but sell only about 15,000 units per year.
“Buying mitumba cars doesn’t create jobs for our youths. We need to rethink and start the transition from second-hand cars to new units if we are to grow our manufacturing industry,” Ms Kavashe advised.
AVA Managing Director Matt Lloyd said the company is partnering with 10 brands - Toyota, Scania, Volvo and Tata - that have expressed interest in setting up shop for contract assembly where there is demand.
“It is very expensive to set up an assembly plant on your own. We spread the cost of assembling through all the different brands. If you look at the new increase of sales in the market, 45 per cent of the vehicles sold in Kenya in the last two years are locally assembled,” he said at the AVA plant in Miritini, Mombasa, that the Trade Committee toured.
“We are now at 72 per cent. Next year and the year after we think we can get close to 85 per cent. There is a great shift from the completely built units to the locally assembled units.”