Simba Corporation Group Executive Chairman Adil Popat with Malaysian High Commission Charge D'Affaires Fatin Zafirah during the launch of the Proton X70 at the Aspire Showroom on October 3, 2022. PHOTO | DIANA NGILA | NMG
Motor vehicle dealer Simba Corp plans to assemble Pajero Sport and Proton X70 sport utility vehicles (SUVs) at its Mombasa plant from next year, signalling increased local production of passenger cars.
The dealer Thursday launched the Proton X70 — priced at Sh4.8 million— which it is currently importing fully built from Malaysia.
“We plan to start assembling Pajero Sport and Proton X70 from next year,” Dinesh Kotecha, chief executive of Simba Corp, told the Business Daily.
He added that assembling the Proton X70 would require a capital investment of about $2 million (Sh242 million) at its Mombasa-based Associated Vehicle Assemblers plant.
This will be the same amount it spent last year to put up the infrastructure for assembling the Proton Saga model. Mr Kotecha said the capital investment for the Pajero Sport assembly is yet to be confirmed. The auto dealer is already in talks with contractors to get the necessary computerised machinery, as well as specifications for the Proton X70, a Malaysian car manufactured by automaker Proton Holdings Berhad.
“Once we assemble Proton X70, any other brand, which also requires that kind of high-end testing, we will use the same resources but now it’ll be specific for Proton X70,” said Naresh Leekha, an executive at Simba Corp. The company said it has sold over 150 Proton cars since introducing the Malaysian brand in Kenya two years ago.
The move to assemble cars locally is informed by tax incentives, which lower the price of the units compared to those imported fully built from overseas. Lower prices are in turn expected to lift sales by appealing to middle-class buyers who have mostly been buying used models.
The State has set a condition for assemblers to source parts in the local market worth at least 30 percent of the value of passenger cars before they can be exempted from a 16 percent value-added tax (VAT). The exemption is new and specific for assemblers of passenger cars and adds to the waiver of import duty (25 percent) and excise tax (20 percent), which assemblers of all types of vehicles enjoy.
The condition put on the VAT waiver is aimed to push the firms, including Simba Corp and DT Dobie (Volkswagen cars), to expand the list of components made locally to widen the value chain.
