EDITORIAL: Include all stakeholders in proposal on used cars

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The government’s policy proposal to lock some imported cars and their spare parts out of the Kenyan market because there are established manufacturers locally who can make similar cars may be an ambitious step but it calls for further consultations and interrogation before it can be implemented.

Forcing Kenyans to buy certain types of cars from local producers, though meant to create jobs and spur manufacturing, is a restrictive move in a liberal economy.

It carries the risk of generally raising the prices at which such vehicles are bought while also limiting the freedom of choice.

Chances are that the manufacturers are unlikely to produce the vehicles and spare parts affordably.

The best approach would be to challenge them to offer competitive prices and superior quality that would make importation unattractive.

However, to arbitrarily select vehicle types that are to be allowed in or not on the basis of their availability locally may have undesirable consequences and may turn out to be uncompetitive.

High prices

For one, it might encourage manufacturers to lobby to have their vehicles approved even when their quality is not up to par or when their prices are high. Vehicle buyers are familiar with situations in which some locally-assembled cars have questionable quality to the point of performing below second-hand imports especially those of low mileage.

If a brand is put on the list, the hazard exists that the assembler is not incentivised enough to produce the same quality as would be found in the countries where the parent firm is located.

The other consideration in the proposal relates to debating its merits and demerits with stakeholders, including not only the second-hand vehicles dealers but also buyers and spare parts and service providers.

The views of these groups ought to be taken into account to ensure that the proposal is not one-sided, that is, does not just favour manufacturers.

The fact that the government has already proposed to further limit the age of imported vehicles is another pointer that the only winner in the policy is the local assembler.

There ought to be more than one winner in such drastic policy proposals once they are up for implementation.

SOURCE: businessdailyafrica.com

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