Passat or Mercedes: The economics of car ownership

By XN Iraki

The raging debate over the model of cars our leaders should driver is diversionary. Whether it is a Passat or a Mercedes, does not matter. The two models are not made in Kenya anyway. They are imports from Germany. Should we not be making a choice between two Kenyan models—Nyayo Pioneer and Nyayo Mallo?

What is clear from the debate is that a car is not a means of transport, but a status symbol. When I drove a Vitz, a friend asked me why I was joining "baby class."

Curious, most Kenyans know about cars outwards, their shape, model, speed and so on. But, to most people, what happens below the bonnet is a mystery.

Public approval

We know the cars that people drive but we do not where they live or what else they own.

What is worrying the Ministers may not be the terrain in their constituencies, but the ‘lowering’ of status. Many fear their voters, friends and admirers will not take them seriously if they drive a Passat.

American economist of Norwegian descent Thorstein Veblen wrote more than a century ago about conspicuous consumption. Veblen may have realised that most of the goods and services we buy are not for ourselves but for "other people."

This is the silent audience that we think care about what we consume.

If you buy a new car, you assume that everyone sees it and talks about it. Some suggest even wives are for public approval, otherwise why do we hold elegant public weddings yet love is a matter of the heart?

We even make bold attempts to force the audience to notice us and our cars, by buying loud music systems and other luxuries.

Observers could argue that our obsession with cars is a sign of our inadequacy. It is a reflection of our emptiness and longing for recognition. Aren’t there more long lasting status symbols like how well you have educated and disciplined your children?

Or how long people will remember you for the contribution you made to the society? Do you know the car Mahatma Gandhi and Nelson Mandela drove or drive? Where do we go from here?

Should we not be thinking of how to make a Kenyan car instead of making choices among imported cars?

Those versed with auto engineering will tell you that though modern cars are more advanced in terms of dynamics and electronics from EFI to VVTi, the fundamental engine design has remained the same in the last 100 years and that technology is easy to replicate.

By the time we got tired of laughing at Nyayo Pioneer in 1980, Hyundai had launched The Pony, which disappeared from Kenyan roads to reappear more upgraded as Excel, Sonata, Vera Cruz, Tucson and other models. Hyundai is now giving Toyota a run for their money.

How many jobs would we have created through Kenyan made cars? Think of the multiplier effect?

Think of national "feel good" effect from owning a car model. Imagine a lively debate in German Bundestag (Parliament) as coalition

partners fight over what car model to buy for their Ministers, Nyayo Pioneer or Nyayo Mallo or whichever model would be "ours"?

Why are no ministers suggesting that we develop a Kenyan car, an idea abandoned 30 years ago?

That is why last week called for psychologists to help explain why we love pessimism. Yet a big component of economic growth is about our feelings. We buy goods and services because we have faith in future.

Need rethinking

A huge part of market capitalisation is made of faith in ourselves, our economy and future. Why can’t we be a country of doers?

How comes the constitution which require no raw materials, except our brains has been debated for two decades?

How comes when other nations are debating interplanetary journeys we are obsessed with the choice of car models to buy not to make?

Back to psychologists, why are the Japanese so successful in whatever they make from cars to electronics yet if you look at curriculum of most universities worldwide including ours they are not so different?

Beyond oil

What is the missing link in our quest to be doers and not talkers, proposal writers and conference conveners?

Why do we still believe that economic growth is a black box? Does our economic model need rethinking?

Look at the Arab countries like Dubai, or Qatar. They are thinking beyond oil, setting up airlines and service centres they will rely on when oil runs out. What have oil rich African countries set up from the revenues?

Let us go beyond consumption; it is time we looked at the supply side of the economy. We need to start making our own products.

They may not necessarily be cars, but I believe there is something we can sell to the world beyond hakuna matata, kikoi and the wild animals that nature has already created.

The writer is a lecturer at the University of Nairobi, School of Business. xniraki@aol.com

 

 

Read all about: Mercedes Kenya Fel Guzzler Wedding

 

 

---