Opinion
Ban the importation of used motor vehicles altogether
Posted Tuesday, August 4 2009 at 17:39
To start with, we will utilise the existing capacity of 60,000 units on two shifts. Then we can set up other assembly plants as follows: Tanzania – 30,000 units, Uganda – 30,000 units, Burundi – 15,000 units, and Rwanda – 15,000 units. This will reduce costs through economies of scale.
SECOND, FREIGHT CHARGES WILL come down. While the freight cost of a completely built-up vehicle is 50 to 70 per cent of FOB price, that of a completely knocked down kit is a mere seven per cent.
Three, local content is available. It ranges from about 25 per cent for a saloon to 60 per cent for a bus. This will create additional employment and enhance disposal income. It will also bring down the total ownership experience costs because of the after-sales back-up.
In conclusion, therefore, let us put these lamentations by Kaba to good use: ban importation of used vehicles to initiate the development and growth of a viable and sustainable EAC motor industry.
Mr Kitau is the managing director, Bruce Trucks and Equipment (EA) Ltd.
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Submitted by muthinja1Posted August 05, 2009 04:02 PM
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Submitted by Afrikanese
This is an idea whose time is long over due. In the west, especially Germany, UK and USA, they are giving huge discounts to motorists to encourage them to get rid of used, old jalopies to aid the environment and to stimulate growth of the new car industry. Banning importation of used cars, while it would upset a few, eventually it would be in the greater interest of Kenya and the East African community.
Posted August 05, 2009 01:30 PM -
Submitted by Anonymous author
A total ban is not necessary Mr Kitau. Perhaps what the motor vehicle assemblers and mainstream dealers like you need to do is to aggressively do a better job of promoting and competitively pricing your products and services to attract more customers. This is the time to take advantage when so many Kenyans are being duped into buying clunkers. A ban will only curtail free market principles that offer choice.
Posted August 05, 2009 12:45 AM -
Submitted by Thiankolu
This is an insightful article. The author could have enriched it by assessing the economic soundness of our retrogressive taxation regime for imported vehicles. Why should cumulative taxes almost be equal to the FOB value of a car? What are the economic losses/costs, in terms of maintenance and accidents, for imported used cars? How many domestic industries (electronics, seats, glass etc) would be promoted by local assembly?
Posted August 04, 2009 09:58 PM
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Talk of banning used vehicle imports is untenable, since Political leaders have huge stakes in the trade. But, I learned to import my vehicles direct, from the rip-offs by even KABA members. They all tamper with odometers, and you never see the original import documents, ever. But then, when shall we ever industrialise, if we remain Mitumba Nations?