CS orders State entities to buy locally made cars : The Standard

After failing to boost car manufacturing in the country, the Government has now decided to arm-twist State agencies into buying locally assembled vehicles. National Treasury Henry Rotich Cabinet Secretary yesterday said that starting July 1, all government ministries, departments, agencies as well as other public entities will have to give priotised procurement of locally assembled motor vehicles, tricycles and motorcycles. This comes after official data showed that new car manufacturers Peugeot and Volkswagen (VW) had failed to impress, two years since they made a grand return to Kenya despite heavy government incentives But Rotich said the move was aimed at promoting local industries through the ‘Buy Kenya Build Kenya’ initiative. “Mr Speaker, with effect from July 1, 2019, all ministries, departments, agencies, and other public entities are required to give exclusive preference in procurement of motor vehicles and motorcycles to firms that have assembly plants in Kenya,” said Rotich.

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"This will go a long way in spurring the growth of local auxiliary industries and enterprises and create employment opportunities for the youth.” The move will see cars that do not have local assembly plants affected. After the hyped re-entry of the two automakers, production of assembled vehicles in the first 10 months of 2018 remained a far cry from the peak of 2015 when 8,713 vehicles were produced in the same period. Instead, a paltry 110 additional vehicles were made from January to October last year, bringing the total to 4,308, according to data from the Kenya National Bureau of Statistics (KNBS). This was a marginal increase of 2.6 per cent from the 4,198 vehicles assembled in the same period in 2017. This even as the car assemblers enjoyed tax relief and assurance of a ready market by the Government. Early last year, Volkswagen said it would double production in Kenya and introduced a new model at its Thika plant. As a result, the Government offered new assemblers some tax reliefs, including 15 per cent corporate tax rate from January 1, last year, for the first five years. This was aimed at promoting the assembly of vehicles in Kenya. While relaunching its operations, Peugeot said it would assemble at least 1,000 vehicles monthly, bringing its total annual production to 12,000. But according to the KNBS, the highest number of vehicles produced by local assemblers was 10,181 in 2015.

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Henry RotichGovernmentStateLocal cars