Kenya plans to restrict imports of second-hand cars to newer vehicles in an effort to boost its domestic automotive sector
The government believes this will reduce the dominance of the used car market.
A policy that encouraged imports of cheap second-hand cars undermined the East –African country’s thriving vehicle assembly industry in the 1990s
According to a draft policy proposal, by 2021,the government intends to restrict imports of cars to vehicles that are three years old or newer. Current regulations allow the importation of cars up to eight years old.
Imported second-hand vehicles account for 85 percent of Kenyan car purchases, amounting to 86,626 vehicles in 2017 and gobbling up foreign exchange estimated at about 60 billion shillings ($593 million) a year.
The government says the target is to gradually but systematically reduce and replace the over 80 percent market share of used vehicles and used parts with new products manufactured or assembled in Kenya
French carmaker Peugeot SA closed its Kenyan assembly plant in 2002 but resumed operations in 2017 for two of its models.
Peugeot’s move followed Volkswagen’s 2016 resumption of light assembly in Kenya after a four-decade absence.
“The policy is good. It will give investors in the auto sector an assurance that their investments will be safe in the long run,” said Rita Kavashe, head of Isuzu East Africa.
Rita believes Investors will take the Kenyan market seriously