Nairobi: The government has rolled out the Kenya National Automotive Policy to revitalize the automotive industry by promoting local assembly and manufacturing. Trade Cabinet Secretary Lee Kinyanjui says the policy was deliberately tailored to gradually reduce the over-reliance on imported used vehicles.
According to Kenya News Agency, the policy introduces incentives and tax regulations favorable to stakeholders in the local market. Interventions like the duty remission scheme will regulate the importation of automotive parts such as batteries, radiators, and brake fluids, boosting local industries. Mr. Kinyanjui noted that enhancing the use of locally manufactured parts will promote the manufacturing sector in the country.
Mr. Kinyanjui emphasized that the Kenya National Automotive Policy is a significant step toward transforming the country’s automotive industry. By focusing on local manufacturing, promoting cleaner vehicles, and fostering a thriving ecosystem, the policy aims to create a more sustainable and prosperous automotive sector. The government plans to raise a bond in Japan, with at least Sh13 billion allocated to promote the growth of the local automobile industry through affordable credit facilities.
The policy will support local manufacturers of various automotive components, who will be eligible for funding. The government is fostering a stable policy framework, endorsing business-friendly tax regimes, enhancing security for businesses and investors, and investing in infrastructure such as roads and reliable power supply systems.
Mr. Kinyanjui stated that government interventions aim to reap significant dividends in employment creation, technology transfer, and contribution to the gross domestic product. Local assemblers are also enjoying import and excise duty exemptions for semi-knockdown kits to promote local assembling, with the local automotive assembly having an installed capacity to assemble 46,000 units annually.
The Cabinet Secretary highlighted the role of Technical and Vocational Education and Training (TVET) institutions in producing skilled graduates who will shape the country’s industrial revolution and innovations. The automotive industry, he noted, is a key driver of macroeconomic growth and technological advancement.
Kenya imports an average of 7,600 second-hand vehicles per month, but the policy aims to reduce this by promoting local assembly and manufacturing. The industry is poised to create forward and backward linkages, with potential job creation and economic growth.
Mr. Kinyanjui expressed optimism about the future of the automotive sector in Kenya, with the policy designed to support the industry’s growth and transformation into a significant contributor to the national GDP. The policy also addresses environmental concerns, setting standards for emissions and promoting green initiatives.
The National Automotive Policy is expected to create over 200,000 jobs in Kenya directly or indirectly, if the right investment environment is put in place. The policy aims to enhance infrastructure development needed for the automotive industry, including parts manufacturing.
Kenya is seen as an advanced economy with potential for significant growth in the automotive sector, having been involved in automotive assembly for Original Equipment Manufacturers (OEMs) like Toyota, Volkswagen, and Nissan.
