Market News

Kenya’s new vehicle exports grow 55% in half year


Rita Kavashe, Managing Director of Isuzu East Africa. Isuzu recorded the highest export volumes with 110 units during the reporting period, up from 67 units a year earlier. PICTURES | DIANA NGILA | NMG

New vehicle dealers exported 137 units to the regional market in the six months to June, marking a jump of 55.6 percent from the 88 units they delivered to neighboring countries a year earlier.

Data from the Kenya Motor Industry Association (KMI) shows that dealerships including Scania East Africa, Isuzu East Africa and Inchcape Kenya have exported their respective vehicle brands to Tanzania and Uganda.

Isuzu recorded the highest export volumes with 110 units during the reporting period, up from 67 units a year earlier. Formal dealers sell most of their vehicles in the local market but also export to the regional market where some have subsidiaries or affiliates.

The export market is limited due to differences in rules on vehicle age restrictions, with Kenya having one of the strictest laws which limits vehicle imports to a maximum of eight years from the date of Date of manufacture.

Kenyan companies, which have invested the most in local vehicle assembly, say harmonizing rules and incentives affecting the automotive sector could unlock more demand from the region.

Kenyan companies currently hold small market shares in neighboring countries, measured by their exports compared to total sales.

Uganda, for example, sold a total of 1,356 new vehicles in the six months to June and imported only 42 units from Kenya during the period.

“Looking at opportunities within the East African Community (EAC) region, the full implementation of the 25% customs duty on vehicles imported under the Common External Tariff (CET) of the EAC would unlock huge benefits for the automotive industry in the region,” Isuzu East Africa said recently.

The company added that a proposal to introduce a five-year limit on all imports of used vehicles into EAC member states has not been implemented.

“While Kenya already has an eight-year age limit, the other partner states have requested more time to consult each other,” Isuzu said.

Looser import restrictions make used imports cheaper due to the impact of depreciation, an outcome which in turn makes new vehicles less attractive, especially to price-sensitive individual buyers.

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