Uhuru warns automotive sector against sabotaging local assembly

In Summary

• The Head of State said private sector actors should always put the interests of the country first.

• The policy, will among other provisions, lay down the legal and institutional framework necessary to guarantee regulatory certainty for investors.

President Uhuru Kenyatta is taken on a guided tour of the Assembly line during the Inauguration of the Toyota Kenya Limited Hilux Pickup Model Range Knock Down Local Assembly line, Miritini, Mombasa county, on Friday, October 18, 2019.
President Uhuru Kenyatta is taken on a guided tour of the Assembly line during the Inauguration of the Toyota Kenya Limited Hilux Pickup Model Range Knock Down Local Assembly line, Miritini, Mombasa county, on Friday, October 18, 2019.
Image: PSCU

Anyone trying to scuttle government policies aimed at creating jobs for Kenyans is engaging in a futile exercise, President Uhuru Kenyatta has said.

While presiding over the launch of Toyota Kenya’s new assembly plant in Mombasa on Friday, the President warned private sector players against sabotaging the government’s policy to give priority to locally produced goods in state procurement.

He said investors who are interested in winning government supply tenders, especially in the automotive sector, should get into the business of local assembly or manufacturing.

 

“The public sector has clear instructions to prioritise locally assembled vehicles in their procurement decisions. However, I have noted with concern, that some of the players in the automotive sector are actively campaigning against this initiative by the government to support the investment in local assembly of motor vehicles,” the President said.

The Head of State said private sector actors should always put the interests of the country first and should adjust their business models to fit into Kenya's development aspirations.

“As we implement the “Buy Kenya” agenda, we expect the private sector to reciprocate by investing in full automotive manufacturing; form joint ventures, training and building the capacity of local Small and Medium-sized Enterprises (SMEs) to provide local content inputs,” the President said.

The President challenged Toyota to scale up its investments in Kenya from assembling vehicles to tier one component manufacturing and the eventual establishment of a fully integrated vehicle manufacturing plant in the country.

He said the government is putting together a National Automotive Policy as part of measures to support local vehicle manufacturers and instructed Trade, Industry and Cooperatives CS Peter Munya to present the policy to Cabinet for approval within three weeks.

“The overall objective of the policy is to provide our domestic industry with opportunities to achieve competitiveness in manufacturing of automotive and parts products,” the President said.

The policy, will among other provisions, lay down the legal and institutional framework necessary to guarantee regulatory certainty for investors.

 
 

It will also define the desired knock down kits levels for vehicles and motorcycle assembly as well as articulate the fiscal incentives and other measures needed to stimulate local content development.

The policy will also outline the role of Technical and Vocational Education and Training (TVET) in the development of the automotive industry.

President Kenyatta said Kenya is positioning itself to take advantage of the huge market created by the adoption of the African Continental Free Trade Area (AfCFTA) which holds an enormous market potential of 1.27 billion people.

Toyota has invested Shs1 billion in the new assembly line designed to assemble the new Hilux 4x4 pick-up trucks.Kenya’s motor vehicle assembly industry registered an annual turnover of 600 million USD (including regional dealerships) last year and employs more than 12,000 people.

Volkswagen and Peugeot opened new production lines in Kenya in the last two years while General Motors substantially increased their investment in the local assembly of heavy commercial vehicles.

Cabinet Secretary Peter Munya, Jomvu MP Badi Twalib and the President of the Toyota Tsusho Corporation  Ichiro Kashitani also spoke at the launch event attended by hundreds of the motor industry stakeholders.