· Kenya is getting some investments from India, in the form of an
assembling unit for cars
· Mahindra & Mahindra, an Indian automaker has commenced
assembling two of its small commercial trucks in Kenya
· The Indian auto maker’s investment is coming at a time, Nairobi
is planning to limit the age of second hand vehicles that can be
imported into the market
Kenya is getting some investments from India, in the form of an
assembling unit for cars. Mahindra & Mahindra, an Indian automaker
has commenced assembling two of its small commercial trucks in Kenya.
This is the first investment of the Indian car maker in Kenya, East
Africa’s richest economy. French carmaker Peugeot SA and Germany’s
Volkswagen AG, both resumed their operations in Kenya in 2017 and 2016
respectively. They had disbanded their assembly for decades. Kenyan
government is offering a range of incentives, such as tax breaks the
investors.
The Indian auto maker’s investment is coming at a time, Nairobi is
planning to limit the age of second hand vehicles that can be imported
into the market. The government is not encouraging used car imports,
which is quite common in African countries, to motivate automakers to
invest in the local market. Significantly, 85% of Kenya’s autos,
particularly cars are used ones mainly imported from Japan while the
rest are locally assembled. An insignificant number of cars are brand
new imports.
Mahindra’s top brands are Scorpio Single and double cabin small trucks
are assembled at a plant in the coastal city of Mombasa. The facility
is owned by its local partner, car retailer Simba Corporation. The
strategy of the Indian company is to make Kenya a gateway to Africa.
Kenya’s President Uhuru Kenyatta is keen to develop his country into
an auto hub and is considering how to give auto loans to consumers to
boost the demand. Mahindra & Mahindra, an automaker with good track
record in India, is currently in an expansion mode, driven by severe
demand constraints in the local market.
