Automotive

The Automotive industry in Kenya is primarily involved in the retail and distribution of motor vehicles.

Overview

There are a number of motor vehicle dealers operating in Kenya, with the most established being Toyota (East Africa), Cooper Motor Corporation, General Motors, Simba Colt and DT Dobie. There are also three vehicle assembly plants in the country, which concentrate on the assembly of pick-ups and heavy commercial vehicles.

The established dealers face intense competition from imported second-hand vehicles, mainly from Japan and United Arab Emirates. These imports now account for about 70% of the market. The last decade witnessed a significant decline in the number of new vehicles sold in the country. There has been a steady recovery in the last four years, but the numbers achieved still fall far short of the numbers recorded a decade ago. In 2004, the leading motor vehicle companies recorded sales of 9,979 units. Although 27% better than the previous year, this is still well below the levels achieved in the early 1990’s.

The Kenya Motor Industry Association (KMI), the representative body of the corporate participants in the motor industry, has been lobbying hard to reverse this trend. Some of these measures have helped the industry recover from its lowest point in 2000, when only 5,869 units were sold. On their part, the companies themselves have become more innovative in responding to customer needs.

Some of the measures that KMI has been advocating include:

Implementation of strict criteria on importation of second hand vehicles
Incentives to promote local assembling of commercial vehicles
Export incentives aimed at encouraging car manufacturers to expand operations in the region.

PwC provides services to major companies in the Automotive sector in Kenya and the East Africa region.

The slump in the volume of new cars sold is attributable the increased competition from second hand vehicles and the depressed economic environment.

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