Volkswagen Polo Vivo cars at the Kenya Vehicles Manufactures production line in Thika yesterday. PHOTO | DIANA NGILA
What you need to know:
The Polo Vivo comes with a warranty of three years or 120,000 kilometres. Customers can also sign up for a three-year service plan at a cost of Sh99,000 or Sh2,750 per month.
The Volkswagen Polo Vivo, the first family car to be assembled in Kenya, has been priced at Sh1.65 million inclusive of valued added tax (VAT).
Standard features on the 1.4 litre, five-door hatchback include automatic transmission, air-conditioning, CD player, alloy wheels and raised suspension.
“This particular vehicle with these features retails at Sh1.65 million inclusive of VAT,” Zarak Khan, the chief executive of motor dealer DT Dobie said during the launch of the car at Thika-based assembly firm Kenya Vehicle Manufacturers.
The Polo Vivo comes with a warranty of three years or 120,000 kilometres. Customers can also sign up for a three-year service plan at a cost of Sh99,000 or Sh2,750 per month.
DT Dobie will sell the car locally.
The price of the Polo Vivo is about Sh1.3 million in South Africa where it is the best selling family car.
Its introduction in Kenya marks the latest attempt by new vehicle dealers to wrest market share from used car sellers who account for about 80 per cent of total vehicle sales.
The formal dealers are betting on the prices of less than Sh2 million combined with multi-year warranty and after sales service to gain an edge over second hand imports whose key selling point is knock down prices.
Simba Corporation early this year started selling Renault Kwid, a small SUV, at Sh1.2 million inclusive of VAT.
The Kwid has an 800cc engine and is being offered with a three-year warranty.
DT Dobie and Simba are eyeing first time car buyers among the burgeoning middle class who largely rely on imported used cars from Japan which are priced lower than new vehicles.
Second-hand cars sell from as low as Sh700,000 depending on the model, year of manufacture and condition.
For DT Dobie, the introduction of the Polo Vivo entrenches the Volkswagen franchise it acquired from CMC Holdings.
Other VW models, including light trucks, will also be assembled at KVM — where DT Dobie has a 32.5 per cent stake — going forward. Assembly of VW vehicles also marks a return of the German automaker to local production after pulling out in 1977.
The multinational used to assemble VW vans, microbuses and the famous Kombi.
Local assembly is largely boosted by the exemption of vehicle parts headed for local assembly plants from the 25 per cent import duty levied on fully built cars, resulting in a price advantage.
Increase in production
Dealers say the recent move by the government to scrap a 20 per cent excise tax on locally assembled vehicles could see an increase in production.
The Kenya Revenue Authority (KRA) had started collecting excise tax from KVM, General Motors East Africa (GMEA) and Associated Vehicle Assemblers (AVA) for the first time last year at a flat rate of Sh150,000 per vehicle.
The levy was raised to 20 per cent of a vehicle’s value in June, sparking protests from the assemblers who said the move had led to job cuts and reduced sales.
President Uhuru Kenyatta said his administration is committed to growing Kenya’s industrial base through investing in infrastructure and enacting progressive policies.
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