New vehicle dealers exported 137 units to the regional market in the half year ended June, marking a 55.6 percent jump from the 88 units they delivered to neighbouring countries the year before.
Data from the Kenya Motor Industry Association (KMI) shows that the dealers, including Scania East Africa, Isuzu East Africa, and Inchcape Kenya exported their respective vehicle brands to Tanzania and Uganda.
Isuzu had the highest export volumes at 110 units in the review period, up from 67 units a year earlier. The formal dealers sell most of their vehicles in the local market but also export to the regional market where some have subsidiaries or affiliates.
The export market is limited due to differences in rules on vehicle age restrictions, with Kenya having one of the strictest laws that cap vehicle imports at a maximum of eight years from the date of manufacture.
Kenyan companies, which have invested the most in local vehicle assembly, say harmonization of rules and incentives touching on the automotive sector could unlock more demand from the region.
Kenyan firms currently hold small market shares in the neighbouring countries as measured by the exports they make against total sales.
Uganda, for instance, sold a total of 1,356 new vehicles in the six months to June and imported only 42 units from Kenya in the period.
“Looking at opportunities within the East African Community (EAC) region, the full implementation of the 25 percent duty on imported vehicles as per the EAC’s Common External Tariff (CET) would unlock tremendous benefits for the auto industry in the region,” Isuzu East Africa said recently.
The company added that a proposal to introduce a five-year limit on all second-hand vehicle imports in EAC member states has not been implemented.
“While Kenya already has an eight-year age limit, the other partner states sought more time to consult,” Isuzu said.
Looser import restrictions make used imports cheaper due to the impact of depreciation, an outcome that in turn makes new vehicles less attractive especially for price-sensitive individual buyers.