Chinese firm enters Kenya’s auto market

The assembly plants are aimed at helping the manufacturers avoid the 25 per cent import duty on imports, following the strategy by Western brands like Toyota, Nissan, and Isuzu commercial trucks that are assembled locally.

The Chinese and western firms are expected to concentrate their rivalry in the commercial segment which is the fastest growing in the new vehicle market.

Data from the Kenya Motor Industry Association (KMI) shows that local sales of commercial vehicles rose 12.7 per cent to 9,873 units last year from 8,757 units in 2010.

Chinese firm Great Wall Motors has entered the Kenyan market, highlighting the rising interest of global vehicle manufacturers in the local and regional market.

Great Wall has appointed CICA Motors as its local distributor in a move that is set to raise competition in the new commercial and saloon car markets.

CICA, which is a subsidiary of CFAO Group that also owns DT Dobie and Company Kenya, won the exclusive dealership and has already sold 15 units of the Great Wall Motors out of the first shipment.

The dealer has started selling Great Wall’s Wingle pick-up and Haval sports utility vehicle (SUV) as it expands its product line beyond Hyundai commercial trucks.

Great Wall’s entry comes after fellow Chinese firm Foton setup its own dealership and assembly plant from scratch.

Chery, another Chinese firm, has also announced plans to establish an assembly plant in Kenya.

The expansion of the relatively cheaper Chinese brands is set to raise competition against Japanese and European brands like Toyota and Mercedes.

Strong following

“We are confident that Great Wall Wingle pick-ups and the Haval SUVs will gain a strong following in Kenya,” CICA said in a statement.

The local and regional market has captured the interest of global vehicle manufacturers, with the entry of the Chinese auto makers raising competition against established Western firms like Nissan Motors and General Motors.

The EAC market, which recently came under a Common Market, is emerging as a major consumer of goods and services, boasting of 126 million people whose incomes are rising.

Foton East Africa has just completed its assembly plant in Nairobi and is selling its pick-up and heavy commercial trucks locally and in regional markets like Tanzania and South Sudan.

The assembly plants are aimed at helping the manufacturers avoid the 25 per cent import duty on imports, following the strategy by Western brands like Toyota, Nissan, and Isuzu commercial trucks that are assembled locally.

The Chinese and western firms are expected to concentrate their rivalry in the commercial segment which is the fastest growing in the new vehicle market.

Data from the Kenya Motor Industry Association (KMI) shows that local sales of commercial vehicles rose 12.7 per cent to 9,873 units last year from 8,757 units in 2010.