Kenyans slowly embracing locally produced cars – assemblers

Nyeri woman representative Rahab Mukami, Voi MP Jones Mlolwa and Simaba Corporation group managing director Naresh Leekha at the Associated Vehicle Assemblers factory in Miritini Mombasa on Friday.

Mombasa-based automobile and commercial vehicle manufacturer-Associated Vehicle Assemblers has projected a high sale of locally assembled units as Kenyans slowly embrace them.

The company targets to hit 6,000 units this year, up from 3,200 assembled and sold last year, with the increase being driven by increased demand.

According to AVA managing director Matt Lloyd, this is a big leap from the average production for the last 15 years which has been around 2,400 on average.

“Next year, we are looking at maybe 9,000 vehicles,” said Lloyd.

Lloyd said for the last two years, 45 per cent of the vehicles bought or sold in Kenya were locally assembled.

“This year, we are now at 72 per cent. Next year and the year after we think we can get close to 85 per cent,” said Lloyd.

He spoke on Friday at the AVA factory where the National Assembly Trade Committee had toured.

He said there has been a move away from the Completely Built Units (CBU) to the locally assembles units.

He said new players are coming into the Kenyan market which is starting to see previous CBU now being assembled locally.

AVA, for instance, has partnered with 10 companies that want their vehicles to be assembled in Kenya(Contract assembly), meaning more job opportunities for Kenyans.

They include Toyota, Scania, Volvo and Tata which have expressed interest in setting up shop in places with high demand.                                

Contract assembly means spreading the cost of assembly throughout the different brands.

Isuzu Motors East Africa CEO Rita Kavashe said the auto industry is a big enabler of economic growth and development in a country.

However, they sell less than 15,000 vehicles per year in terms of new vehicles.

This can easily be doubled with the implementation of an automotive policy, which the country is yet to finalise, Kavashe notes.

“For us to grow our manufacturing we need to rethink and start transitioning from the use of second-hand vehicles from abroad to the use of new vehicles from within the country,” said Kavashe.

This way, jobs will be created locally, she noted.

“When we have the critical mass that we need then the cost of production for these three plants will come down and the buyers will be able to enjoy a better price than they are enjoying today,” she said.

Although there are interesting incentives like the assembly regulations already in place, Kavashe said, more still needs to be done.

For instance, when importing goods under Completely Knocked Down (CKD) levels two and three, there is no payment of import duty.

This has resulted in more investors setting shop in Kenya.

“The three plants were not producing pickups, for instance, here in Kenya but since last year Toyota, Mitsubishi and Isuzu are already producing in the country,” said Kavashe.

Simba Corporation group managing director Naresh Leekha said the good reception of the Proton Saga, assembled in Mombasa at the AVA, was an indicator that Kenya can produce brand new vehicles and stop overreliance on imported second-hand vehicles.

He said the Covid-19 restrictions slowed down the sale of the Proton Sagas due to disruption in international trade which affected the importation of CKD kits.

“As the economy is opening, we see a lot of uptake of locally assembled cars because customers are getting cars that have zero mileage, five-year warranty, and longer life at the price of a mitumba,” said Leekha.


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