Toyota raises stakes with Sh3.2b investment

By John Oyuke

Toyota Corporation has announced plans to invest Sh3.2 billion ($35 m) in the country this year, in a bid to expand market share and consolidate its position as a leading vehicle assembling firm in East Africa.

The Japan-based automobile company plans to buy 50 per cent shares in a local motor vehicle assembly company, upgrade and expand the plant to enable it reintroduce the Hilux range of pickups, as well as additional models of the Land Cruiser 70 series.

Toyota Kenya chairman, Dennis Awori, said the firm would invest in the expansion of Associated Vehicle Assemblers to assemble Hino trucks and buses, in addition to building a regional vehicle and parts centre in Nairobi.

"The company intends to further expand the models assembled locally to include left hand Drive Vehicles for sale in Rwanda, Burundi, Sudan, Ethiopia, Eritrea and Djibouti," said Awori.

Investment plan

He also announced that Toyota has a comprehensive investment plan for Eastern Africa covering several sectors including energy, agriculture, regional vehicle and parts distribution with the expanded vehicle assembly.

Awori was speaking in a meeting hosted by Industrialisation Permanent Secretary Dr Karanja Kibicho at the Ministry’s headquarters.

Awori and the Toyota team were in the Ministry to seek an interpretation on KS1515, the Kenyan Standard for Motor Vehicles. The standard touches on certain components of the completely knocked down kits (CKDs) that the firm would be importing to assemble in Kenya.

Kibicho assured the team of the Ministry’s commitment to facilitate investment and expansion of industries in the country.

He called on Toyota to consider increasing the local content in the vehicles they assembling in the country by subcontracting to smaller local industries that have the capacity to produce quality products.

He said these firms could provide components of vehicles they would assemble.

The PS noted that by subcontracting, motor vehicle assemblers in the country the firm would support a number of companies that supply local content material such as tyres, springs and electrical harnesses.

Bring harmony

They could also supply bus and truck and pick up bodies, steel, batteries, exhaust systems, upholstery and brake pads among other items.

"By assembling affordable vehicles locally, Toyota would help bring harmony to the models of motor vehicles in the local market and hence effectively support the products during service," said the PS.