Importers oppose govt plan to ban importation of second-hand cars

Second hand vehicle importers have vehemently opposed a proposal by the Ministry of Trade and Industry to ban the importation of used motor vehicles come the year 2022, terming it a false move in the presidential lead agenda to bolster manufacturing.

Kenya Auto Bazaar Association (KABA) chairman John Kipchumba said the move will only benefit a few individuals, to the detriment of the car-imports market segment.

“The ministry chose to put as aside and engage a handful of fellows from the motor industry, leaving us alone, only to come up with a policy with direct consequences on our very existence. Neither the Ministry nor manufacturers seem to get the market dynamics. What manufacturers are trying to do is equitable to having your cake and eating it ,” Mr. Kipchumba said in an interview with Citizen Digital.

While the association notes that it is supportive of the government’s transformation agenda, it is lobbying the state to put forth an inclusive policy to include all stakeholders in the sector.

“We are supportive of the president’s manufacturing pillar but this growth has to be inclusive. There are many products that can be manufactured locally but are currently imported. I give the very simple example of Chinese-toothpick imports, this should not be the case,” Mr. Kipchumba added.

The remarks by the car importers come on the back of the pronouncement of a total ban on used car imports in four years time by the Trade and Industry Cabinet Secretary Peter Munya.

The ban is described by the minister as part of a greater plan to boost local vehicle assemblage under a soon-to-be launched National Automotive Policy Framework.

The current state of domestic motor manufacturing remains well below the threshold to meet market demand.

A 2016 analysis for instance shows one locally assembled vehicle for every 13.5 imported units, taking into account a total of 85,063 motor-vehicle imports across the year against 6,295 locally manufactured units over the same period.

A National Automotive Policy must therefore put in place rapid measures to bridge the local assembly gap to imports as soon as July 1, 2019, when the ban on used vehicle imports with engine capacities surpassing 1,500 cubic centimeters (cc), and older than 5 years begins.

The matatu industry is similarly opposed to the impending ban citing increased operational costs on business. These costs are highly  likely to be passed on to consumers in the form of elevated bus fares.

The industry’s representation further calls for a stay of older vehicle imports to help shield the industry from a potential domestic monopoly market which may at any one time chose to put up exorbitant costs to new vehicle units.

“It would be better for the local assemblers to face competition from cheaper vehicle imports for even market prices. We understand the need for the rejuvenation of the country’s manufacturing sector, this should not however leave chance for exploitation,” Matatu Owners Association (MOA) chairman Simon Kimutai told Citizen Digital.