Business

State mulls auto sector protection

The government is considering new ways to shield local car manufacturing industry from unfair market competition, Industry Cabinet Secretary Adan Mohamed said yesterday.

He said that the ministry in collaboration with automakers, was finalising a new legislation that will support the growth of local auto assembly and component manufacturing.

“We should have tariffs reduced for local car assemblers. The high costs of additional taxes, charges, levies as well as logistical charges need to be waved or reduced so that the industry grows and becomes competitive,” he said.

The ministry, he added, was also looking into the concerns being raised by manufacturers regarding the high cost of power which is affecting their production and growth, noting that the removal of Value Added Tax (VAT) on electricity would spur the industry’s growth. Mohamed was speaking in Limuru where he commissioned a Sh500 million auto parts factory by Auto Springs East Africa.

The company is expected to be the country’s largest original equipment manufacturer of motor vehicle parts such as leaf springs, nuts, and centre bolts, wheel studs, shackle and pins.

Mohamed said the draft Motor Vehicle Policy being prepared by the Ministry of Industry, Trade and Co-operatives together with auto manufacturers, auto vehicle makers, aims to boost local assembly of vehicles.

Task force “We are at the tail-end of developing the policy which will be spearheaded by a special task force that will come up with programmes to review the age limit of imported cars and other incentives to drive the industry’s growth,” he added.

He said the task force will be tasked to also explore whether motor parts which are imported can be manufactured in the country without compromising their quality.

The CS also said that the government would reduce the level of motor parts importation to make it possible for local companies to buy from local manufacturers of vehicle parts.

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