Resolve second-hand car import stalemate


The government’s decision to lower the age limit for imported high-capacity engine vehicles has raised eyebrows. The bone of contention among vehicle importers and buyers is that they were not consulted. They say the announcement that imported cars above 1,500cc will be required to be less than five years old from June this year was announced from the blue.

Trade minister Peter Munya has stood his ground, saying limiting the age of the vehicles is good for the environment, frees the market for local manufacturers and that adequate consultations were made prior to the Draft National Automotive policy.

Importers do not dispute the environmental benefit. The big question is whether there is adequate local manufacturing capacity to meet the demand for vehicles at affordable prices. Without it, the consumer would be left at the mercy of new car dealers, who represent Asian, European and American interests here.

One of the undeniable facts is that Kenyans have turned to importing used cars — more than 85,000 units last year — due to the forbidding prices of locally assembled vehicles, about 12,000 of them last year.

Without imports, local assemblers and motor vehicle dealers would by now have turned into an oligopoly pricing transport, a key mover of the economy, out of the reach of the average Kenyan. The government has not helped itself by turning to South Africa and Europe in search of suitable bus rapid transit motor vehicles to serve urban areas, starting with Nairobi.

Among the likely explanations for that is lack of local capacity to assemble, let alone manufacture the buses and that the transactions are motivated by fraud. By targeting vehicles above 1,500 cc, the government wants to kill several birds with one stone. It will promote industrialisation, reduce pollution, collect more tax, curb fuel consumption from guzzlers and stop high-value car imports for money laundering.

These goals, if well-explained to all stakeholders without resorting to bulldozing the policy, would provide a basis for compromises that take into consideration the public interest, livelihoods of importers and transport needs of all Kenyans.

Stakeholders can arrive at a middle ground — which includes lengthening the phasing out and reviewing the engine capacity to be affected. The local vehicle assembly sector would also need to be revamped substantially so that it is ready to absorb the demand unlocked by a stricter importation regime.

In addition, local assemblers have to review pricing to make vehicles affordable. Owning a vehicle has become a necessity.


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