Kenya has decided to reduce the age limit on used vehicles allowed into the country to promote local assemblers, who are struggling to increase the sale of new vehicles in a market choking with imports.
Industrialisation Cabinet Secretary Adan Mohamed says Kenya is on the verge of reducing the age limit on imported used vehicles from eight years to five years. The move is awaiting finalisation of a policy document that will outline the implementation process.
Local AssemblersWhile used-vehicle dealers have strongly opposed the move, government is determined to put the brakes on imports to boost local assemblers, who account for less than 10% of the vehicle market.
“Government is keen to support the local automotive sector through various initiatives and policies, including reducing the age limits on imported used cars,” Mohamed said during the fifteenth edition of the Total Motor Show, which was held recently in Nairobi, the capital city of Kenya.
He added that imported used vehicles, which have flooded the Kenyan market, had made it impossible for new investors in the automotive sector to thrive, resulting in new-vehicle sales accounting for only one-tenth of the average 90 000 units sold each year.
Imports of used vehicles into Kenya have been increasing at an average of 10% a year, with Japan the key source country, followed by the European Union and the US.
The influx of used vehicles is one of the reasons why US automaker General Motors and dealers like RMA have opted to exit the Kenyan market, while global assemblers that have opened shop in the country are finding it hard to increase sales.
Germany’s Volkswagen, which opened an assembly plant in Kenya in December 2016, managed to sell 104 only Polo Vivo vehicles in 2017. Other global companies that have set up assembly operations in Kenya are Peugeot, Tata, Daewoo and Volvo.
According to the Kenya Vehicle Manufacturers Association, new-vehicle sales dropped by 20%, from 13 535 units sold in 2016 to 10 722 units in 2017.
In a recent report, the United Nations Environmental Programme states that Kenya is one of the African countries that are choking from imported used vehicles, which are worsening air quality.
In the East African region, Kenya has an age limit of eight years and Tanzania ten years, while Burundi, Rwanda and South Sudan have no formal age limits for imported used cars. On the entire continent, only Egypt, South Africa, Sudan and Morocco have imposed a total ban on used-vehicle imports.