Kenya, Japan seek to transform motor vehicle industry

Trade Cabinet Secretary Rebecca Miano and Japan Trade Minister Yasutoshi Nishimura when they held bilateral talks in Osaka City in Japan on October 29, 2023. [Courtesy: Ministry of Trade]

Kenya and Japan have launched an Industrial Policy Dialogue to indicate the direction of industrial collaboration that will contribute to strengthening economic relations between the two countries.

The Cabinet Secretary for Trade, Investment and Industry Rebecca Miano who met the Minister for Economy, Trade and Industry for Japan Yasutoshi Nishimura during bilateral talks on October 29 said that this aims to support the mutually beneficial relation between the nations.

Miano who is in Japan for the G7 Trade Ministers meeting in the City of Osaka said that Kenya and Japan have agreed to initiate a Joint cooperation to improve market access through strengthening supply capacity for product development and export development.

"Kenya and Japan have confirmed that the detailed framework of Industrial Policy Dialogue would be decided by both sides at the working level for the Ministries of Trade, Investment and Industry of Kenya and the Ministry of Economy, Trade and Industry of Japan," said Miano.

The Cabinet Secretary observed that globally Africa features favourably as the next frontier for investments and Kenya stood strategically for Japan as a reliable partner, to manufacture for the African continent and the world in general.

Miano said that Industrial Policy Dialogue will go a long way in helping the two countries prioritize their investments and that she had agreed with her Japanese counterpart to regularly engage and champion the cause for investments, trade and industry for the mutual benefit of the two countries.

In a separate meeting with the top management of Toyota Tsusho Corporation, Miano encouraged the company to leverage Kenya's strategic posture and scale up local manufacturing of parts and components for the company's assembling facility in Kenya.

"It is the right time that Toyota Tsusho Corporation worked with Kenyan counterparts to develop the requisite capacity for the Kenyan-based facility's enhanced operations, targeting the greater African Market under the Africa Continental Free Trade Agreement among other markets," said Miano.

The Cabinet Secretary informed the Investors that the National Automotive policy was developed in a consultative process between the Government of Kenya and the automotive industry stakeholders and provides for making Kenya the destination of choice for the industry.

Miano said that in light of emerging industry trends, as highlighted by the Toyota Tsusho management, it was agreed that the ongoing development of the automotive bill and regulations therein also be done in close consultation with the industry stakeholders.

"It was noted that with encouragement that Kenya has made milestones as an automotive assembly hub for the African region supported by well-skilled manpower and the availability of assembling facilities, it was resolved that the Toyota Tsusho Corporation continue to work with the Ministry of Investments, Trade and Industry to further its business interests," said Miano.

The Cabinet Secretary committed to supporting the finalisation of the automotive bill and automotive regulations being expedited in collaboration with the industry stakeholders while Increasing Local content will enable the automotive industry to feature favourably in market access of the region on the criteria of rules of origin.

Miano said that the bill and regulations will provide for End-of-Life Vehicle recycling for both used cars and batteries, thus helping to rid the country of an otherwise growing menace of waste and that currently it is estimated that over 70,000 vehicles are lying in junkyards after coming to the end of their useful life.

It was resolved during the meeting that End-of-Life Vehicle recycling should go hand in hand with a reduction in the age of second-hand vehicles allowed into Kenya, which in turn is anticipated to drive up demand for new vehicles and hence support local assembling with attendant increase in job creation.

"We noted that the growth of the industry has not been in tandem with capacity development for the local manufacture of parts and components thus occasioning falling out of some of the players and thus slowing down the projected scaling up of the number of locally produced parts and components in the locally assembled vehicles," said Miano.

The Cabinet Secretary said that the meeting with Toyota Tsusho Corporation management advocated for a deliberate capacity building of the local manufacturers of parts and components to ensure that they can keep pace with the industry's demands, with regard to the level of technology and volumes.

Miano said that to support the transition into new and environmentally friendly technology which requires new types and more efficient batteries, the Kenya Bureau of Standards will expedite the development of standards for the new type of batteries and electric motors.

"On electric vehicles development It was agreed that the industry considers developing an appropriate supportive infrastructure such as local manufacture of energy efficient batteries and charging systems to aid swooping and making them convenient for use and hence making them popular," said Miano.

The Cabinet Secretary said that noting that the Kenya vehicle manufacturers -one of the local automotive assembling facilities in Kenya- is experiencing financial difficulties, it was agreed that Toyota Tsusho, as one of the stakeholders in the industry, steps in to save the facility from imminent collapse.

Miano said that it was agreed that the Toyota Academy will consider the possibilities of broadening the scope of training and capacity development to enable many Kenyan youth to engage in meaningful and viable businesses in tandem with emerging industry trends.

"Noting with great concern the messy situation and deplorable behaviour of the boda boda operators in Kenya, which has left many dead or injured, it was recommended that under the company's Corporate Social Responsibility it considers intervening to impart organization into the bodaboda sector," said Miano.