RESTRICTIONS

Kenya bans used bus imports, controls trucks in new rule

Move aimed at promoting local assembly of units.

In Summary

•All types of used passenger minibuses used in the country’s famous matatu industry will not be allowed to be imported.

•Used midi-buses common with corporates, large buses, single articulated and bi-articulated buses and double decker buses will also not be allowed.

PSV minibuses on a congested Tom Mboya Street in Nairobi/
PSV minibuses on a congested Tom Mboya Street in Nairobi/
Image: WILFRED NYANGERESI

Import or export of used buses to Kenya from July 1 has been banned in the latest move by the government to protect and promote local assemblers.

This comes amid tax incentives announced by National Treasury CS Ukur Yatani in the 2022-23 budget  targeting the local motor vehicle industry.

The Kenya National Bureau of Standards(Kebs) plans to ban importation of all types of used passenger minibuses used in the country’s thriving  matatu industry, effective July.

Used mini-buses common with corporates, large buses, single articulated and bi-articulated buses and double decker buses will also not be allowed for importation into the country.

However, used passenger micro-buses of up to seven metres overall length(commonly used by tour firms, companies and the likes of SWVL) shall continue to be imported, but strictly under the country’s eight-year rule.

All used rigid trucks with GMV (Ground Mobility Vehicle) equal to or greater than 3.5 tonnes and up to and including 30 tonnes, shall not be allowed for importation into the country.

These are mostly used as shot-distance freighters in the country.

In the long distance trucks segment, only tractor heads and prime movers not older than three years, from the year of first registration, will be allowed for importation, a move that will hard hit transporters.

This shall apply up to June 30, 2023 after which, no used tractor heads and prime movers shall be allowed for importation into the country, Kebs notes.

“All other used road vehicles not mentioned above shall continue to be imported provided they are not older than eight years from the year of first registration,” Kebs managing director Bernard Njiraini says in a yet to be published notice seen by the Star.

All imported new diesel powered and petrol powered vehicles shall be type approved to meet the requirements of EUROIV/4 before importation into the country.

These are European emission standards on vehicles which have been evolving with a progressive introduction of increasingly stringent environmental standards.

Details of Euro 7, the final standard, are expected out this year and probably come into force in 2025.

Most used cars imported into the country are Euro 4 according to importers, who have previously questioned the ability of local assemblers to meet the standards.

According to Kebs, the new directive to ban used buses and other units is under the Kenya Standards 1515:2019-Road Vehicle-Inspection of Road Vehicles-Code of Practice as mandatory Kenya Standards by the Industrialisation, Trade and Enterprise ministry.

The government has been keen to promote local assembly of units as part of its industrial growth and job creation strategy.

In his 2022-23 budget statement on April 7, Yatani said assembly of motor vehicles and manufacture of motor vehicle parts locally has gained traction.

In order to encourage more investment especially in the manufacture of passenger motor vehicles locally, he proposed to exempt from VAT inputs and raw materials used in the manufacture of passenger motor vehicles.

Additionally, he proposed to exempt locally manufactured passenger motor vehicles from VAT.

Currently, locally assembled motor vehicles are exempt from excise duty.

“In order to ensure the same treatment for manufactured passenger motor vehicles, I propose to exempt from excise duty locally manufactured passenger motor vehicles. This is aimed at encouraging investment in this sector and enhancing competitiveness of locally manufactured passenger motor vehicles,” Yatani said.

Major assembly plants to benefit from the latest move are Nairobi’s Isuzu, Mombasa’s Associated Vehicle Assemblers (owned by Simba Corp), Thika’s Kenya Vehicle Manufacturers (owned by the government), DT Dobie and CMC Holdings).

Isuzu East Africa CEO Rita Kavashe yesterday welcomed the move saying it will create an opportunity for growth of the local assembly industry. 

Latest industry data by the Kenya Motor Vehicle Industry Association (KMI) shows a resurgence on sales of new motor vehicles after a slow-down during the pandemic.

Dealers such as Isuzu East Africa, Toyota Kenya, Simba Corporation (which sales Mitsubishi), and Transafrica Motors (dealers of FAW), sold 14,250 units last year, a six-year high.

The performance also represented a 29.8 percent increase compared to the 10,977 units sold in 2020.

The share of locally assembled vehicles rose to a record 70.6 per cent of the total sales in 2021.

In 2019, the government banned importation of used trucks with load capacities of 3.5 tonnes and above, but had allowed importation of second-hand minibuses.

The latest move by the government affirms its stand that local assemblers have the capacity to build these vehicles.

President Uhuru Kenyatta has been keen on his government’s support for the growth of local industries, encouraging local motor vehicle assembling as opposed to imported used cars, which he says:“have flooded the country.”

“We want to revive the automotive industry in Kenya. It used to be at one stage that the majority of vehicles that used to traverse our roads were actually assembled by our own young Kenyans,”Uhuru said during the commissioning of the Malaysian Proton Saga saloon cars, at the Associated Vehicle Assemblers (AVA) in Mombasa.

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