Disgruntled used car dealers question state of Kenya's industry
- The plan caused uproar among used vehicle dealers who claim it is a ploy by the government to punish the poor.
- Kaba chairman Major (Rtd.) John Kipchumba complained that his association was kept in the dark during the drafting of the policy.
- Kipchumba said Kenyans have deliberately been misled into believing the country has a vibrant local automotive manufacturing industry.
The Kenya Auto Bazaar Association (Kaba) has reiterated its opposition to the government's proposed policy on imported used cars, terming it a "total failure".
The policy will 'kill' the local industry, Kaba said on Sunday, noting this industry is not as vibrant as the public imagines.
Trade and Industry Cabinet Secretary Peter Munya says the Draft National Automotive Policy, prepared by his ministry, proposes to limit the age of imported used cars with engine capacities of more that 1500 cc from eight years to five this year, and then to three years in 2021.
The plan caused uproar among used vehicle dealers who claim it is a ploy by the government to punish the poor.
Mr Munya says the plan is intended to promote the local car manufacturing industry but Kaba chairman Major (Rtd.) John Kipchumba laughed this off saying that for a very long time, “Kenyans have deliberately been misled into believing the country has a vibrant local automotive manufacturing industry".
“If the ministry insists that the country has local automotive manufacturers, can the ministry then publicly table a list of local companies currently manufacturing cars or even vehicle components in Kenya and confirm if they are, indeed, also meeting the 40 percent local content requirement?"
Mr Munya’s assertions may have been informed by the activities of motor companies such as Isuzu East Africa along Mombasa road in Nairobi, Kenya Vehicle Manufacturers Limited (KVM) in Thika and the Associated Vehicle Assemblers Limited (AVA) in Mombasa.
Mr Kipchumba reminded him that these companies are not local but importers and assemblers of semi-knocked down parts and essentially local agents of auto manufacturing companies based abroad.
He also challenged the three companies to “come out and clearly explain to the Kenyan public who they really are and exactly what they do".
Addressing journalists in Nairobi on Sunday, Mr Kipchumba further complained that his association was kept in the dark during the drafting of the policy, which he vowed to fight it all the way to the courts.
Mr Kipchumba claimed that Kaba’s request to have dialogue with the CS was met with a "dead ear" and wondered whether Mr Munya is "above the law".
He is also a aeronautical engineering (avionics) graduate of the Hindustan Institute of Technology and Science and a telecommunications engineer trained at the Royal Air force, UK.
The Constitution provides for public participation in the formulation of public policies, laws and other serious engagements that the government plans to undertake.
At a recent briefing, Mr Munya said they consulted widely before the policy was drafted and that the aggrieved have the alternative of importing smaller cars with the eight-year limit or buying from the local market.
“Not everyone will support a policy because it is not a consensus-building process,” he said.
Mr Kipchumba also accused Mr Munya of playing protectionism with the aim of favouring multinational corporations (MNCs) instead of supporting the local industry.
“That policy is a total failure. Why would you subject Kenyans to the mercy of MNCs? We will not allow it,” said the retired Kenya Air Force fighter pilot.
"Please, Mr Munya, come to your senses because you can’t dream in bed and then tell us this is the way to go. Never!”
Last week, the used car dealers called on President Uhuru Kenyatta to block the implementation of the proposed policy, terming it discriminatory and citing lack of consultation.
About 85,000 units of used cars are imported annually by dealers with the local assembly standing at a paltry 10,000, meaning that local activities will be insufficient for Kenyans.
Kaba claimed it contributes Sh49 billion in taxes to the government annually and is a crucial player in fulfilment of Mr Kenyatta’s Big Four agenda of manufacturing.
According to Mr Munya, the policy has several other proposals that will see no one discriminated. These include more incentives for local manufacturers to make new and affordable cars for the local market.