General Motors Kenya to double truck output on construction boom
07 April 2016, 21:46
Nairobi - A construction boom in Kenya has
fuelled a rise in commercial truck sales for market leader General
Motors, which is investing $7.9 million in 2016 to upgrade its assembly
plant in Nairobi and more than double output, a senior executive said on
GM East Africa Managing Director Rita Kavashe said 20,000 new vehicles were sold in Kenya last year, the highest on record, and 98 percent of those were trucks and buses.
reflected both the strong commercial sector as infrastructure projects
take off, as well as the prevalence of second-hand passenger cars which
dominate the clogged roads of the capital Nairobi.
ago we were producing about 10 vehicles and following upgrades and
improvements, creating efficiencies has moved our production to about 22
vehicles a day," she told Reuters in an interview.
"We continue to improve our processes, so we should be able to comfortably get 25 vehicles a day by mid of next year."
Nairobi plant, one of three GM manufacturing hubs in Africa, is geared
towards the commercial bus and truck market and typically builds trucks
weighing between 3.5 tonnes and 15 tonnes. GM also has a presence in
South Africa and Egypt.
General Motors' total global vehicle sales were 9.8 million in 2015, up 0.2 percent in a third consecutive year of record sales.
Eighty percent of the vehicles sold in Kenya or around 80,000 cars a year are low-priced used vehicles.
"We are advocating for the reduction of age limits for second-hand vehicles to get away from complete dumping," she said.
At the moment only Kenya has
a law limiting the age of cars, up to eight years, that can be imported
although none of its East African neighbours have a similar law.
East Africa also sells its vehicle to markets in Tanzania, Uganda,
Rwanda and Burundi - all members of trade bloc East African Community.
excise duty of around $1,500 imposed by the government from the
beginning of the year has helped curb some of the second-hand imports,
but has also hurt the new vehicle market and was regarded as a "step
backwards" as Kenya sought to become the main automotive hub for East Africa, she said.
said the outlook for the market for this year has been tempered
somewhat as higher interest rates hit consumers and government
reprioritises project spending.
"We are seeing a decline in the
auto sector, with January to March already we've seen a decline of 14
percent compared to last year," she said.