Kenya buys 94pc of used vehicles from Japan


Newly imported second-hand vehicles being offloaded from a Cargo Vessel at the Mombasa Port. FILE PHOTO | KEVIN ODIT | NMG

Japan accounted for 94.3 percent of the 62,495 used vehicles exported to Kenya in the 12 months to June 2023, official data shows, cementing the Asian country’s top vehicle brands’ stranglehold on the local commercial and private used car market.

A total of 58,972 units were shipped from Japan in the period, followed by the United Kingdom at 1,921 and Thailand at 1,061.

The UK imports are dominated by European vehicle brands, while Thai imports are mainly pickup trucks.

Besides used imports, Japanese car brands such as Toyota, Honda, Isuzu, Subaru, Mitsubishi, Mazda and Nissan are sold through local franchise holders, which offer warranties, parts and services to their customers.

While the data does not break down the import numbers per brand, earlier accounts showed that by 2018, Toyota Motor Corporation took up just under 60 percent of all motor vehicle sales in Kenya —used plus new— followed by Nissan, Honda and Isuzu.

The most popular makes of Toyota include Probox, Corolla, Land Cruiser, Hiace and Vitz. Sales of Probox have surged in recent years owing to its versatile use as a carrier of people and cargo.

Small businesses and households are the biggest buyers of used cars, hence the popularity of brands that offer models addressing these two segments.

Small-capacity cars used for taxi-hailing business have also been key in driving up the demand for Japanese models whose attractiveness is further augmented by being rated among the most reliable globally.

Shipments have, however, been affected by global shocks in the last three years, including delivery delays caused by the Covid-19 pandemic which led to shutdowns of ports and production plants in source markets such as Japan.

It also caused a shortage of semiconductors, which are a key component in modern cars.

Forex costs are also becoming a key factor behind car import numbers, due to the sharp depreciation of the shilling against the dollar, euro and British pound.

Tax changes in the 2023 Finance Act, where the government increased duty on imported cars to 35 percent from the previous 25 percent, have compounded the cost problem by slapping an extra charge of up to Sh300,000 per vehicle on the yard price.

This rise in import taxes has also ended up increasing the other taxes on cars such as the excise duty and value-added tax (VAT), as these taxes are loaded and paid cumulatively in that order.

The increased duty is part of the Ruto administration’s plan to raise Sh211 billion in additional revenue this financial year ending June 2024.

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Note: The results are not exact but very close to the actual.