Companies operating vehicle assembly plants in Kenya have increased production by nearly a third following growing demand for locally assembled vehicles.
This was also the result of an increase in the number of firms with vehicle assembly lines and rising production capacity as various brands look to take advantage of incentives by the government.
The companies produced a combined 6,307 units between January and October last year, 30 per cent more than the 4,820 produced over a similar period in 2018, according to data by the Kenya National Bureau of Statistics.
The statistics agency noted that increased local assembly was critical in driving economic growth in 2019, in a year when most sectors posted sluggish growth.
“Under the non-food sub-sector, the growth was supported by an expansion of 21.4 per cent on the assembly of motor vehicles in the third quarter of 2019,” said the agency in a report on the economic performance during the quarter to September.
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The rising number of locally assembled vehicles is, however, yet to make a major impact in the total number of cars sold by dealers, both used and new.
According to the agency, in the nine months to September, Kenyans registered nearly 250,000 vehicles that ranged from motorcycles and saloons to buses and trailers, meaning the locally assembled units accounted for just about two per cent.
Motorcycles, which have in the recent past become key in public transport, accounted for more than 60 per cent of the vehicles registered during the period. A total of 158,000 motorcycles were registered.
The local assembly industry might in the coming years increase its share of vehicle sales if the government of Kenya succeeds in its push to have a thriving auto assembly industry.
The state has in the recent past tried to incentivise vehicle manufacturers to set up in Kenya, with different goodies including tax breaks as well as a requirement for government agencies to give preference to automakers with local assembly lines when buying new vehicles.