You are better off buying cars from showrooms - Toyota boss

Toyota Kenya managing director Arvinder Reel with NIC Bank executive director Alan Dodd during signing of business partnership on February 7th 2019 /DOUGLAS OKIDDY
Toyota Kenya managing director Arvinder Reel with NIC Bank executive director Alan Dodd during signing of business partnership on February 7th 2019 /DOUGLAS OKIDDY

Toyota Kenya is backing the reduction of age limit for imported vehicles with an engine capacity above 1,600 cc from eight to five years.

Managing director Arvinder Reel said introduction of the Draft National Automotive Policy gives buyers an opportunity to own brand new cars.

He said this would give customers vehicles with a warranty, zero mileage and with a longer life span.

Reel’s position comes at a time when the Kenya Auto Bazaar Association which brings together importers of used vehicles is protesting the plan.

The association says the plan if implemented will put many Kenyans out of jobs and deny middle income earners an opportunity to own cars.

Secretary Charles Munyori said the policy would increase the cost of buying a car by between Sh400,000 and Sh600,000.

He said the average price of a used imported car would be Sh1.2 million which is beyond the reach of many.

Countering this argument, Reel said a fully fledged motor industry in Kenya would open up job opportunities.

“An average second-hand saloon car costs Sh2 million while that in the showroom costs Sh2.5 million. Kenyans are very price sensitive but benefits of a brand new car can’t really compare to the Sh500,000 difference,” Reel said.

He spoke during a partnership deal with Suzuki Motor Corporation to distribute its models.

“Local assembly points are not operating to capacity but better incentives for parts will grow the local motor industry,” said Reel.

The Ministry of Industrialisation is in negotiation with dealers in new cars on the policy on tax reforms that can help bring down the cost of new and locally assembled cars.

Through this, the brand new car dealers and local motor vehicle assemblers expect to expand the range of locally assembled models beyond Land Cruiser, Pick-Ups and Hino Trucks.

The distributorship deal with Suzuki is set to increase Toyota Kenya’s market share from the 25 per cent mark in 2018.

This was significant market share growth given the firm commanded 20 per cent of the market in 2017 selling over 14,000 vehicles and 15 per cent with 10,000 sales in 2016.

Its appointment as the second local dealer to distribute Suzuki vehicles puts it in direct competition with the CMC Holdings which previously held the sole rights.

“Suzuki is working under it now non-exclusivity policy as we intend to widen the range that suits all customers,” Reel added.