Though the latter is
a major source, most of the cars that come from the Middle East
are of Japanese origin.
Forty years ago,
there was a big buzz in Kenya when local vehicle assembly
The first company
was General Motors East Africa (GMEA) and was quickly followed
by Kenya Vehicle Assemblers in Thika (or KVM) and Associated
Vehicle Assemblers (or AVA as it has become popularly known).
started operations within a space of two years of each other.
The aspiration then
was that Kenya would become a major vehicle assembler not only
for Kenya but also for the whole of the East African region.
At that time the
East African Community (phase one) was coming along strongly as
was the main drivers in setting up of these plants.
South Africa as
still under apartheid rule and Kenya was seen as the best entre
to serve East and Southern Africa.
Local content very
quickly grew with window glass, seat cushions, wiring harnesses,
batteries, tyres and paints rapidly establishing themselves as
the mainstay of the local content development.
This was largely
achieved by international organisations partnering with existing
smaller local companies.
In some of the other
instances, international organisations established manufacturing
facilities in the country which have since become locally owned
or having a majority local shareholding.
The vehicle assembly
business grew rapidly as the middle class in Kenya and in East
The mainstay of the
assemblers were popular mid sized passenger or private vehicles
such as Toyota Corollas, the Datsun range from Nissan, Isuzus
and the ubiquitous Land Rover.
They also assembled
trucks and buses and partnered with various body-building
companies to customise for the local and regional market.
There were also
The most popular was
the Datsun pick up that came to know as the Datsun Debe because
of its utilitarian nature.
Others to be
customised included the quaint Renault 4L (Quatrelle) which was
renamed the Renault Roho.
However, the first a
dent in growth was when the EAC collapsed and tariff protection
started on exports trade between the three countries that were
the then members of the EAC.
The next major blow
to vehicle assembly in Kenya was the start of large-scale
importation of second hand vehicles into Kenya.
At the start there
were punitive tariffs on importation of fully assembled vehicles
including second hand vehicles.
“hook and crook” the restrictions on the importation of second
hand vehicles was eased and they began to flood the market.
It started with
imports from the Middle East and eventually from the source pool
accommodation by the governments in Eastern Africa dealt a cruel
blow to the high potential assembly plants.
Most were kept going
on a shoestring by assembly of trucks, buses and utility
vehicles that were mainly targeted at the government and service
GMEA became dominant
in the transport sector with a strong focus on small and medium
The Isuzu range has
been the mainstay of the matatu business alongside imported but
mainly second hand Toyota and Nissan microbuses.
After a long time in
the doldrums there have been key pronouncements in the last few
months heralding a return of assembly of models aimed at the
lower to middle end of the market in East Africa.
The first was
Volkswagen which announced its return to assembly in Kenya after
almost forty years. It will start by assembling the Volkswagen
Vivo at the KVM plant in Thika.
The next to announce
a return was Peugeot who will assemble a mix of vehicles
probably at the AVA plant in Mombasa which has traditionally had
Peugeot as a major client especially in the hey days of the 504.
This vehicle formed
the bulk of government purchases for along time – in fact till
the marque was withdrawn from the range.
This return of some
of the large names to Kenya should be a signal to the government
that there is a great opportunity to further create jobs in the
country but only if the right policies are put into place to
encourage and protect investment.
The motor industry
has been through the cycle of early promise to encourage
investment followed by a short lived growth before partisan,
selfish or downright corrupt interventions have killed growth.
Let us wait and see
what kind of support this new interest in motor vehicle assembly
in Kenya will get.
Is it support for
the headlines because of big event later this year or is it
sustained support that will last through several policy cycles.
As Kachumbari says,
the proof of the pudding is in the eating (sic) !