Companies

Dealers assemble record 71pc of new vehicles sold

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Workers at the Isuzu East Africa Vehicle Assembly plant on Mombasa Road during December 2018 media tour. PHOTO | DIANA NGILA | NMG

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Summary

  • Data from the KMIA shows that the formal dealers sold 6,249 units in the period that were imported as completely knocked down (CKD) parts and were later assembled at the plants.
  • Total sales stood at 8,811, including 2,562 vehicles that were imported fully-built from overseas factories.

The share of new vehicles assembled locally rose to a record 70.9 percent in the eight months ended August, signalling increased demand for models put together at plants such as Isuzu East Africa and Kenya Vehicle Manufacturers (KVM).

Data from the Kenya Motor Industry Association (KMIA) shows that the formal dealers sold 6,249 units in the period that were imported as completely knocked down (CKD) parts and were later assembled at the plants.

Total sales stood at 8,811, including 2,562 vehicles that were imported fully-built from overseas factories.

At 70.9 percent, the share of locally assembled new vehicles sold represents a peak in recent history. It tops the market shares of 64.3 percent and 66.6 percent recorded in 2020 and 2004 respectively.

The trend underlines increased demand for commercial vehicles such as pick-ups, buses and trucks –which form the bulk of units assembled in Kenya— and weakening sales of new passenger cars that are mostly shipped in fully-built.

Commercial vehicles have a broad customer base including the government, businesses and non-governmental organisations while new passenger cars have relatively limited demand from the government, wealthy individuals and directors of private firms.

The share of new fully-built imports dropped to a record low of 29.1 percent in the eight-month period, climbing down over the years from a high of 57.9 percent in 2012.

Beneficiaries of the increased demand for locally assembled vehicles include Simba Corporation, Isuzu, Toyota Kenya and DT Dobie. The assemblers have increased the models put together locally amid favourable government policy aimed at growing the sector.

The assemblers now produce nearly 20 models including buses, trucks, pick-ups and passenger cars such as Volkswagen Polo Vivo, Peugeot 3008 (SUV) and 508 (sedan).

Production and sales numbers of Peugeot are, however, not reported by the local franchise holder Urysia Limited.

Most of the assembled vehicles are sold in the local market while a small fraction of the production is exported to neighbouring markets like Uganda and Tanzania.

Assemblers enjoy an exemption from 25 percent import duty on completely knocked down (CKD) parts headed to assembly lines.

The policy is aimed at boosting manufacturing jobs besides enhancing skills transfer.

Assemblers of commercial vehicles got a further boost in 2019 when the government introduced a ban on imports of used trucks with load capacities of 3.5 tonnes and above.

The prohibition came through an amendment to the standards for motor vehicles by the Kenya Bureau of Standards (Kebs).