Car dealers oppose auto sector policy

Second-hand motor vehicle dealers are opposed to the Government’s plan to revamp the local auto assembly industry, claiming that such proposals have been engineered by foreign motoring firms.

They argue that such firms are also looking for ways to dispose of their old technology from their operations in developed markets. The plan offers local manufacturers incentives, which the Ministry of Industrialisation said will spur the local manufacturing sector.

Second-hand auto industry players, however, say this would kill their businesses. The rule proposes a ban on importation of vehicles above five years starting in July.

The age limit, which targets vehicles with a larger engine capacity above 1600cc, will further reduce to three years in the next two years.

The State is eyeing zero imports for this range of cars by the year 2024, in a move that the Ministry said would “help expand the market for locally assemble vehicles”.

The Kenya Auto Bazaar Association (Kaba), a lobby for second-hand vehicle dealers, however, claimed that global automakers have been pushing for the total ban of second-hand cars into Kenya as they look for markets for their locally made units.

Kaba Chairman John Kipchumba noted the auto firms are looking for easy ways to dispose of old plants that are being phased out in their operations in developed countries.

“We are strongly opposed to this draft policy because it is not in the interest of the country. It is being driven by multinational automotive manufacturers represented in Kenya by assemblers and new motor vehicle franchise holders,” said Kipchumba yesterday.

“They want to shift their market from Europe to Africa and they have been engaging Ghana, Nigeria, and Kenya.”

He spoke when Kaba, together with Car Importers Association of Kenya, handed a petition to the Kenya Bureau of Standards (Kebs) - asking the agency to do away with the new rules that are expected to take effect July.

Kebs oversees the age limit rule is adhered to by importers. Other than the reduction in age limit of imported vehicles, the Government has proposed several measures to promote the local vehicle assembly industry.

In the draft National Automotive Policy, the Ministry hopes to position Kenya as a regional vehicle manufacturing hub, giving Governments and individuals from EAC and beyond the option of buying vehicles with ‘zero mileage’, designed for the local terrain and at an affordable cost.

In the policy, the Ministry expects new vehicles assembled in Kenya to contribute Sh50 billion in taxes per year in the next five years, from the current Sh8 billion.

The industry will also create 150,000 direct jobs at the assembly plants, up from the current 6 000 jobs. Kaba claims dealers in used cars pay Sh48 billion in taxes annually.