Industry

Used truck dealers risk closure on imports ban

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Isuzu East Africa vehicle assembly plant along Mombasa Road on December 6, 2018. PHOTO | DIANA NGILA | NMG

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Summary

  • Dealers in used commercial vehicles have protested the impending ban on second-hand imports of buses and trucks.
  • 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.
  • Used commercial vehicle dealers say supply gaps in the market and inconsistent policy in the East African Community (EAC) will shift the business to neighbouring countries as local players face closure.

Dealers in used commercial vehicles have protested the impending ban on second-hand imports of buses and trucks, saying the market dynamics will threaten their viability once the restrictions are enforced.

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.

Used commercial vehicle dealers say supply gaps in the market and inconsistent policy in the East African Community (EAC) will shift the business to neighbouring countries as local players face closure.

They note that countries such as Uganda continue to allow imports of used commercial vehicles which also operate transport businesses in Kenya, adding that most European models of prime movers are not assembled locally.

“Local dealers will have to close shop with consequential job losses,” said Paul Kimani, the managing director of Nairobi-based TNL Motors, one of the largest importers and distributors of used prime movers and trucks.

“The local resale market for commercial vehicles is not well developed and it is difficult to adapt by sourcing here. Vehicles used abroad are also in much better condition than those used in the local market.”

He added that small investors in the transport business are likely to take more of their orders to other neighbouring countries as they will face higher vehicle prices in the Kenyan market.

Eight-year-old prime movers imported from overseas are retailing from an average of Sh6 million while most new ones cost more than Sh12 million.

Mr Kimani said the two-month notice ahead of the July 1 ban is inadequate as it will hurt dealers whose imports will arrive after that date.

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.

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