Kenya is committed to hosting more automotive players to increase local production of vehicles, president William Ruto has said.
President Ruto noted that the National Automotive Policy has created a conducive environment for firms to set up in Kenya adding that the policy has tamed instability in the sector, especially regarding tax laws.
However, in the recent months, motor dealers in the country have been downsizing their operations in the country and shifting bases to neighbouring countries.
“Our plan is for more assemblers to set up and operate at full capacity so that we can supply Africa with competitive units.” The president said yesterday when he launched the first ever electro-deposition paint plant at the Isuzu East Africa in Nairobi.
The President said this will create more jobs, enhance skills development and reliable mobility.
However, in April this year, automobile dealer, CMC Motors Group declared at least 169 of its workers countrywide redundant after losing dealerships on Ford, Suzuki and Mazda franchises in Kenya.
CMC lost Ford dealership to rival Salvador Caetano.
In 2018, CMC also lost exclusive dealership of Suzuki cars after CFAO Motors (then trading as Toyota Kenya) was appointed as the second representative of the Japanese automaker.
On the other hand, Mazda is expected to announce the new distributor in the coming months.
Effectively, Salvador Caetano will handle Ford from the third quarter of 2023 while Suzuki will be supported by CFAO motors (formerly Toyota Kenya), from the second quarter of 2023.
The three vehicle brands have since terminated their distribution deals with the company choking key lifeline of the motor industry dealer with subsidiaries in Kenya, Uganda and Tanzania all wholly owned by the Al-Futtaim Group based in the United Arab Emirates (UAE).
Yesterday, president Ruto maintained that it was time for Kenya to claim its rightful place among Africa’s leading vehicle manufacturers.
It is expected that the Sh500million will deepen the firm’s manufacturing, improve local production and make it globally competitive.
Among those present during the event include; Isuzu East Africa Managing Director Rita Kavashe, Trade Principal Secretary Alfred K’Ombudo, Isuzu East Africa Chairman Hiroshi Hisatomi, Deputy Chief of Mission Counsellor in the Embassy of Japan Kitagawa Yasuhisha, among others.
“With investments like Isuzu’s, we can propel Kenya back to its original vision of leading Africa’s automotive competitiveness.” The president added.
He urged investors to advance their investment in Kenya by moving into tier one component of manufacturing.
He said Kenya intends to fully exploit the immense opportunities presented in the automotive industry’s untapped potential.
Yasuhisha noted that Isuzu’s investment will stimulate the transfer of technology, knowledge and expertise.
“It also furthers eco-friendly manufacturing at a time when the world is confronting climate change.” Ruto added.
For the last four years, Isuzu East Africa has invested Sh1.3billion in the expansion and upgrade, sending a clear signal of its confidence in Kenya as an investment destination.