HIGH VOLUMES

Second-hand car imports up as eight-year rule deadline ticks

Units manufactured in 2014 will not be allowed into the country starting January 1.

In Summary

•Both individual importers and dealers bringing in units in high numbers.

•Starting January 1, only vehicles first registered in 2015 will be allowed into the country under the eight-year rule that locks out older used cars from being shipped into Kenya.

Imported used cars parked at a yard in Mombasa/
Imported used cars parked at a yard in Mombasa/
Image: JOHN CHESOLI

Commercial and individual used car importers are rushing to bring in 2014 manufactured units ahead of the December 31 deadline.

Starting January 1, only vehicles first registered in 2015 will be allowed into the country under the eight-year rule that locks out older used cars. 

According to the law, any vehicle older than eight years is not allowed into the country and can either be destroyed or shipped back at owners cost.

If granted import exemption, taxes for these vehicles are higher.

Monthly average imports increased to above 10,000 units from September, car importers note, with November expected to record up to 13,000 units or more.

Normal average monthly import is 9,000 units.

There are at least eight motor vehicle carrying vessels expected to dock at the Port of Mombasa in less than two weeks, Kenya Ports Authority ship schedule shows.

Three of these are expected to dock on November 3.

“There is a rush to bring in 2014 units. People want to have the units arrive and get registered before the deadline,” Car Importers Association of Kenya (CIAK) national chairman, Peter Otieno, told the Star in a telephone interview yesterday.

About 80 per cent of imports are from Japan with other markets being United Kingdom, United Arab Emirates, Singapore and South Africa.

Second-hand cars dominate the local market accounting for 85 per cent of Kenya's car purchases, with an annual import of up to 90,000 units.

The rush to beat the deadline comes after more than 18,000 units manufactured in 2013 arrived late last year, due to delays caused by the Covid-19 pandemic disruption in the shipping industry.

Lobbying by sector players however saw the government allow clearance of imports that had documents indicating the orders were made on time, and indeed delays were on shipping the units as a result of the pandemic.

The eight-year rule once caught up with importers in 2014 when more than 2,000 used motor vehicles registered in 2006 were locked out of the country, leading to losses of millions of shillings by dealers and individuals.

Since then, individuals and importers have been rushing to beat the deadline with no major lockout reported, save for last year when the pandemic struck.

The government has been seeking to further reduce the age limit to five years to promote local assembling and address emission concerns blamed on combustion in old cars.

More than 80 per cent of the cars on Kenyan roads, considered by some to be new imports, are used cars in Japan that are sold at cheaper prices of an average Sh300,000.

Taxation and shipping of these units however pushes the prices to above the one million mark at most used-car showrooms in the country. The minimum price of locally assembled units is Sh1.5 million.

When President Uhuru Kenyatta launched the local assembly of the Malaysian Proton Saga saloon cars, at the Associated Vehicle Assemblers (AVA) in  Mombasa, the price per unit was Sh1.1 million inclusive of VAT.

It has however shot up to Sh1.566 million with the assemblers attributing the increase on a rise in freight charges in the wake of a vessels shortage, occasioned by the Covid-19 pandemic.

During the launch, the President supported the growth of local industries, encouraging local motor vehicle assembling as opposed to imported used cars, which he said have flooded the country.

Industrialisation Cabinet Secretary Betty Maina says the government has developed various policies to boost the manufacturing sector and increase demand for locally manufactured products.

Among them is the automotive policy and the 'Buy Kenya Build Kenya' initiative.