Increased motor vehicle output coupled with a shortage of carriers has could hurt importers of used cars in Kenya rushing to beat the eight-year rule.
Global automakers have reported easing of the semi-conductor chip shortage, which had affected the industry in the past two years.
There is an increase on availability of used cars in key import markets with high export volumes, as owners offload older vehicles in favour of new ones.
Japan's major automakers saw their combined production rise by 14.4 per cent year-on-year to 2.11 million units in October, as the impact of the Covid-19 pandemic on manufacturing and supply chain eased.
The country accounts for about 80 per cent of used-car imported into Kenya with other markets being United Kingdom, United Arab Emirates, Singapore and South Africa.
According to industry data, six of the eight major national manufacturers - all except Nissan Motor Co. and Mitsubishi Motors – have reported an increase in production.
This has eased the shortage that had come with higher prices, forcing owners to hold on longer to their units before putting them up in the second-hand market, a move that saw Kenya record an increase in trading of third generation cars locally.
According to dealers in Kenya, the increased supply has caused a shortage of car carriers in the past four months.
This, they reiterate, is likely to lock out 2015 units under the country’s eight-year rule.
Importers are rushing to bring in units with some now opting to use containers to ship vehicles, as opposed to the mass movement by cargo ships designed to carry wheeled cargo.
There are five carriers expected at the Port of Mombasa between today (Friday) and December 18, bringing in 6,352 units.
However, Car Importers Association of Kenya (CIAK) said a large number of the incoming units are from orders dating back up to three months.
“We have always worked closely with our members to ensure the December 31 deadline is met but due to the vessel shortage, we are likely to see come fail to beat the deadline,” CIAK national chairman Peter Otieno told the Star.
The association has since called on the government to allow vehicles that had been inspected within the right timelines, and are yet to be shipped, to be allowed into the country even after the deadline.
Kenya Bureau of Standards (KEBS) has however remained firm on the age limit rule.
“Only Right Hand Drive motor vehicles whose year of first registration is from January 1, 2016 and later shall be allowed into the country effective January 1, 2023,” Kebs has said.
Further, used or secondhand vehicles from Japan, United Arab Emirates, United Kingdom, Thailand, Singapore and South Africa should be accompanied with a Certificate of Roadworthiness issued by Quality Inspection Services Inc. Japan (QISJ), whose contract it recently renewed.
All vehicles must arrive by December 31.
“Any vehicle registered in 2015 or earlier, arriving after December 31, 2022 will be deemed not compliant and shall be rejected at the importer’s expense,” Kebs said.
Importers were hit by losses in 2014 when more than 2,000 used motor vehicles registered in 2006 were locked out of the country.
Since then, individuals and importers have been rushing to beat the deadline with no major lockout reported, save for 2020 when the pandemic struck.
During the year, more than 18,000 units manufactured in 2013 arrived late as the Covid-19 pandemic disrupted the shipping industry.
The government allowed units whose delays were solely as a result of shipping.
On average, Kenya imports between 7,000 and 8,000 units per month but this goes up to 12,000 units in the last months of the year, when the unit prices also begin to drop in the import source markets.
Meanwhile, automakers are expecting a continued rise in manufacturing of new units.
Toyota Motor Corp. saw its sales increase 23 per cent to 771,382 vehicles in October as its global sales increased by 22 per cent to 832,373 units.
Honda production rose 1.1 per cent to 330,002 units, the fifth consecutive monthly increase.
Suzuki on the other hand reported a 14.1 percent, while Subaru jumped 43.1 per cent.
Nissan's year-on-year output however fell 2.4 percent to 297,801 units in October, joining Mitsubishi, which also reported a drop.
