Kenya used car market

Kenya is the hub of economic, commercial and logistic of the entire East African region and has the most developed economy in the whole East Africa. Lying on the equator, with the Indian Ocean to its South-East, the country has a diverse geography. The increase in the purchase of vehicle reflects increased spending by the country’s middle class, which is growing fast. This develops confidence that the economy of the country is growing. Japan plays a vital role in the automobile industry of Kenya. Large numbers of used vehicles imported in Kenya are from Japan. Kenyans look at Japanese market for used vehicles as Japanese used vehicles are high on quality and are reliable, plus are available at affordable prices. Kenya surely offers a lucrative market for vehicles.

For every 30 Kenyans there is a vehicle in the country. The country import large numbers of vehicles from various countries across the world, but mainly from Japan. When compared with the population of around 40 million, more than 10,000 vehicles are imported in Kenya. For instance, according to the data from the Kenya National Bureau of Statistics, the numbers of used cars sold in 2013 were 76,122 units compared to 61,233 units in 2012. There has been recent growth in the passenger vehicle segment of the country.

For importing a Japanese used vehicle in Kenya, there are few rules and regulations one must be familiar with. The Japanese used vehicle imported in Kenya must be less than eight years of age. The difference between the registration date and the manufacturing date should not be more than a year. Kenya allows importation of only right hand drive vehicles. Left hand drive vehicles are allowed for registration only if they are for special purpose i.e. Ambulances, Fire Tenders and large construction vehicles imported for projects and to be eventually donated to the Kenyan Government. The Kenya Bureau of Standards (KEBS) has appointed JEVIC to conduct the pre-export road- worthiness inspection of used car from Japan, RSA, Singapore, UAE and the UK in Republic of Kenya. For shipping of used vehicles, Mombasa port is used.

Duty and Taxes:-

• Import Duty: 25% of the CIF value of the vehicle.
• Excise Duty: 20% of the (CIF value + Import Duty).
• VAT: 16% of the (CIF value + Import Duty + Excise Duty).
• Import Declaration Fee (IDF) of 2.25% of the CIF is also charged subject to a minimum of KSH. 5,000 payable in advance on application.

Kenyan population prefers to buy used vehicles as used cars account for more than 80% of all vehicles sold in the country. With the increase in demand for used vehicles, many separate units have established in the country that deals in supply of used vehicles from popular brands. There is great demand for used passenger vehicles in the country. Generally for personal use, station-wagon is purchased, whereas for commercial purposes mostly pickups are purchased. The country offers a big market for vehicles and exporters, it is just that vehicle imported in the country should match with the country’s standard and regulations. The market for used vehicles mainly from Japan is very productive. The Japanese automobile industry is apparently determined to become a major supplier of used cars to Kenya.