New entrants shore up number of locally assembled vehicles
MANUFACTURING: The volume of assembled vehicles rose 30 per cent last year, thanks to new entrants helping to boost the manufacturing pillar of the government’s Big Four agenda.
Government data shows that assembled vehicles increased to 6,307 in the 10 months to October compared to 4,850 during the same period the previous year.
Industry players attribute this to the entry of multiple assembly firms into the country on favorable government policies adding that the sector will perform better this year.
Increased output was, however, met with a tough business environment that reduced sales but players are optimistic.
“We expect the market to improve due to favorable State policies such as the National Automotive Policy and a repeal on interest rates caps both of which came into force last year,” said General Motors chief executive Rita Kavashe.
“We are cautiously optimistic about this year and we expected at least at 10 per cent growth in sales,” she added.
The policy passed last year will see local assembly companies get preferential procurement treatment by the government. They will also gain from investment incentives such as taxation.
More jobs were created last year in the assembly sector boosting employment numbers at a time when many Kenyans were being laid off.
Simba Colt chair Addil Popat, however, said Kenya was just doing what it is supposed to do, ensuring the market is not flooded with imports.
However, the automakers said sales were suppressed due to poor business environment last year occasioned by heavy job losses and restricted access to credit.
President Uhuru Kenyatta early last year directed all ministries and other state agencies to buy locally assembled cars in support of the Buy Kenya Build Kenya initiative.
The new assembly lines that have been installed in Kenya include Toyota Hilux’s line put in place in the last quarter of last year.