Assemblers eye 70pc sales jump on used trucks ban

 Isuzu East Africa Vehicle Assembly plant staff at work as seen during a media tour along Mombasa Road on December 6, 2018. PHOTO | DIANA NGILA | NMG

Local vehicle assemblers could see their annual sales jump by up to 70 percent as the government moves to ban imports of used buses and trucks.

The Kenya Bureau of Standards (Kebs) said in a notice that used buses more than seven metres in length will not be imported into the country effective July 1.

Trucks with load capacities of 3.5 tonnes and above will also be banned from the same date. Tractor heads and prime movers not older than three years will continue to be imported until June 2023 after which only new units will be allowed in.

“All used rigid trucks with gross vehicle mass equal to or greater than 3.5 tonnes and up to and including 30 tonnes shall not be allowed for importation into the country,” Kebs says in the notice.

The ban marks the implementation of the new standard (KS 1515: 2019) which was published in 2019 and replaced the earlier one that was in existence since 2000.

The policy is designed to create demand for locally assembled commercial vehicles as part of efforts to create jobs and boost skills and technology adoption.

Data from the Kenya National Bureau of Statistics (KNBS) shows that 4,616 used buses, trucks and prime movers were imported into the country last year, indicating the size of opportunity for local assemblers.

The local firms including Isuzu East Africa and Simba Corporation meanwhile assembled 6,535 buses, trucks and prime movers over the same period.

This means that they could grow their sales of the commercial vehicles by 70.6 percent to 11,151 units, assuming the entire orders for second-hand units previously made abroad converts to local purchases of new vehicles.

Import of used prime movers was highest last year at 2,807, followed by lorries (1,544) and buses (265). Local assemblers produce few prime movers, which haul the greatest loads on the road but are expected to ramp up their output on the implementation of the ban.

Importers of used commercial vehicles are mainly motivated by their relatively cheaper prices but the ban is expected to nudge them to purchase from local showrooms.

Imports of vehicle parts headed to assembly plants are exempted from 25 percent import duty, giving assemblers a price advantage.

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