Car Prices in Kenya Will Double, Importers Warn Against 5-year Age Limit

February 11, 2019

The prices of cars in Kenya are expected to double on the back of a proposed rule that reduces the age limit of imported vehicles to five years, car importers have warned.

The Kenya Auto Bazaar Association (KABA) now wants the government to scrap the plan. According to KABA Chairman John Kipchumba, reducing the age of all used imported cars from the current 8 years to 5 years by 2019, then to 3 years by 2021,  is not the right policy for Kenya.

“This will automatically mean that a car that would cost you Sh.500,000 will now cost you at least Sh.1.2 million,” said John Kipchumba.

He noted that the association is willing to entirely stop the importation of commercial vehicles on condition that 100% of the vehicles are assembled locally and 40% of the components be manufactured locally as well.

“The industry is willing to stop the importation of the commercial vehicles but they have to prove to us that they have capacity to make the cars here,” said Kipchumba.

KABA argues that although the Draft National Automotive Policy is yet to be implemented, some of its recommendations are already exposing the widespread incompetence and lack of know-how in the local vehicle assembly sector.

Car importers Association of Kenya (CIAK) chairman Peter Otieno also echoed KABA’s sentiments saying the move will increase the price of vehicles by between Sh300,000 and Sh400,000, thus locking out many Kenyans and leading to multiple traders closing shop.

“For example, a Toyota Fielder that goes for Sh1.2 million will be retailing at about Sh1.7 million while a Vitz that costs Sh700,000 will cost Sh1.2 million. This will weigh heavily on Kenyans and affect our economy. Very few people will buy cars,” said Mr Otieno.

He added: “I don’t know where they will get the trillions they put in their budgets if they interfere because this is one of the fastest growing industries in this country and the government gets a lot of money from it.

“As soon as they implement that policy they will not collect the projected tax. A good example is Uganda which wanted to reduce the imported vehicle age limit to 10 years but has now agreed with stakeholders to set it at 15,” he said.

Mr Otieno further stated that stakeholders were not consulted on the policy despite an earlier agreement with former Industry and Trade CS Adan Mohamed.

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