Why Lower Car Import Duties will Improve the Health, Safety and Economy for Kenya

Focusing on the short term impact of the new car import duties misses some key long term benefits. By harnessing the spending power of the most wealthy we can improve the air we breathe, reduce serious accident injuries and in the long term the cars in the country’s car pool. Global car importing is becoming more accessible and this should be celebrated, not halted.

Air pollution in Nairobi has 10 times more carcinogenic pollutants than the World Health Organisation (WHO) recommended levels, a very worrying issue for all residents. The 2014 economic survey revealed that the most common illness in Kenya in 2013 was respiratory infections which caused 14.8 million cases. Kenya has 2 million registered vehicles on its roads, but 80% of those are 8 years and older and significant contributors to air pollution in our cities.

The real costs of motoring are much higher in older cars and 80% of cars entering Kenya are close to 8 years old. The Kenyan Motor Industry Association (KMI) estimates that ‘the average age of vehicles in Kenya is 15 years old.’ This is double the global average. These vehicles become increasingly inefficient and costly to repair making it important for Kenya to move to newer more efficient, less costly vehicles. Previous duties law put the heaviest taxes on the more efficient and safer cars and allowed the older cars to be taxed significantly less. This was motivating older cars to be imported rather than helping newer cars feed into the national pool.

Kenyan Motor Industry Vehicle Ages Report

Age of car Percentage of vehicles on Kenya’s roads Cost of Running
0-5 years 10% Most efficient phase, servicing only and minimal parts replacement expected.
5-10 years 20% Operating costs double, emissions increase and fuel efficiency declines.
10 years – 15 years 40% Operating costs double again …or severe a decline in performance, reliability and roadworthiness
15 years + 30% Considered beyond viable design for life and an economic liability.

The global car industry has invested billions in improving safety for passengers and road users. Modern safety features such as air bags and stability control are known to reduce injuries to passengers involved in accidents by 26% and 46%.  
 

Safety Feature Percentage Reduction in
Injured Occupants in and Accident
Electronic Stability Control 46%
Head Side Air Bags 37%
Thorax Side Air bags 2

Source: CTS EMBRARQ Mexico, 2012. Data from ITF

Whilst, not surprisingly older cars are more likely to crash.

Vehicle Age in Years Car-crash Injuries
Above 15 2.88
10 to 14 1.02
5 to 9 1.38
Below 5 1

Source: Blows, S. et al: Vehicle year and the risk of car-crash injury, 2003

Restricted Local Choice

Looking locally, a recent review in December of the top 3 websites dealer websites revealed that 96% of their cars for sale are 7 years old or more and only 2% are European brands. (Cheki, QXL and CarBazaar.com).** So, buying locally can seriously limit your options which can be frustrating when buying a car is one of life’s largest costs. Importing better quality, younger cars would help to improve the health and safety on the roads and reduce emissions and be a more cost effective way to run your car.

Better Car Prices Abroad

Car manufacturers often have different prices in different continents which can provide you with much better value than you can find locally. All prices below are inclusive of all costs to buy, ship clear, register and deliver it to Nairobi.

New Car Import Pricing

  Old Duties Price (Ksh) New Duties Price (Ksh
Toyota Prado TZ-G 7.3 M 6.76 M
Land Cruiser V8 VX 200 Series 14.4 M 12.7 M
Range Rover 5L Autobiography 26.5 M 23.3 M

Used Car Import Pricing

  Old Duties Price (Ksh) New Duties Price (Ksh)
Toyota Prado TX petrol 2.7L 4.75 M 4.48
Mercedes E250 SE (4 yr old) 1.8L 4.93 M 4.5 M
BMW X5 M Sport 4 years old 6.9 M 6.45 M
Land Rover Discovery HSE 3.0 SD V6 9 M 8.12 M
Range Rover Sport HSE 3.0 SD V6 (4 Yr old) 10.2 M 9 M

Asset Finance for Imported Cars

But until recently buying an imported cars needed you to have a good deal of savings and was fraught with fear and mistrust of foreign suppliers. MHH International Ltd in the UK has developed a ground breaking product with the help of Kenya’s leading banks to enable Kenyans to buy imported cars with asset finance from their preferred bank. Alistair Benn the Managing Director reports “Asset finance on imported cars is a revolutionary product as it enables people to buy their ideal car with their preferred local bank. With just a 20% deposit, a consumer can now buy a better quality car whilst carefully managing their budget. The don’t even need additional security” MHH International is the only UK supplier approved to supply cars for asset finance in partnership with NIC Bank, Chase Bank and most recently CBA. So your hard earned money is carefully looked after, removing the fear of sending it to unapproved suppliers abroad. Kenyans are now able to buy a broader range of cars from across the world, that were previously out of reach. Step by step, these changes will help to lower the average age of the cars on our streets, making them safer, healthier, more economical for everyone.

www.mhhinternational.com  0715 248 001  /  + 44(0)1483 275 756

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