Motor dealer Crown Motors Group is in talks with two car assemblers in Kenya, targeting a deal to assemble pick-ups by Chinese automaker Great Wall Motor (GWM), its top officials said, buoyed by tax incentives by the State.
Crown Motors Kenya chairman Lawrence Ndombi said the company was in talks with Simba Corp’s Associated Vehicle Assemblers (AVA) and Thika-based Kenya Vehicle Assemblers (KVM) for a deal to assemble the Chinese pick-ups.
“We are in the process of getting the approvals, we can’t say whether it will be AVA or KVM but we are looking for the most cost-effective assembler,” he told the Business Daily.
Crown Motors, a subsidiary of Johannesburg Stock Exchange-listed Motus Africa, is currently the distributor of built-up GWM pick-ups in Kenya having bagged the franchise last year. It also distributes cars by Nissan, Mazda, Haval and US motorcycle brand UM.
Crown Motors managing director Christophe Henning said that the company had applied for a permit from the government to assemble the GWM pick-ups in Kenya.
“We are in discussion with the government, especially concerning GWM because we want to start with the assembly of its pick-ups,” he told the Business Daily.
“We have handed over the application and we are waiting for an agreement, if we get this agreement by next year, we will increase our volumes much more,” the CEO added.
Vehicle parts for assembly in Kenya are exempt from the 35 percent import duty, giving them a price advantage in a policy designed to encourage local production.
Fully assembled vehicles shipped from various international markets like the United Kingdom, Japan, and South Africa are charged an import duty of 35 percent, excise duty of between 25 percent to 35 percent depending on the size of the engine, and value-added tax of 16 percent. The levies are paid cumulatively and in that order.
Official data from the Economic Survey 2024 shows that the share of locally assembled motor vehicles has been rising from a low of 5,555 in 2018 to 13,106 units in 2023. but this was a 2.8 percent drop from 13,473 in 2022.
Data shows that 7,802 vehicles were assembled in Kenya in 2019, 7,725 in 2020, 9,989 in 2021 and 13,473 in 2022.
Locally assembled vehicles account for the bulk of new vehicles sold in the Kenyan market, according to data from KVM amid push and incentives offered by the government.
In addition to being the largest buyers of new vehicles, companies with strong local production link their growing fortunes to support from the government, which has enacted favourable policies.
Crown Motors, the exclusive Kenyan distributor of Great Wall Motors and Haval brands, launched three new vehicles on Thursday, including its first electric car priced at Sh5.97 million.
The company also added a four-by-four GWM Tank – an off-road car priced at Sh8.7 million and an SUV (H6 GT) selling at Sh7.9 million.
GWM will be the umbrella brand for the rest of the product portfolio, which includes the Haval vehicles.
“We are proud to introduce the ORA, the first electric vehicle to be added to GWM’s product line, the SUV and the tank,” Mr Ndombi said.
