Building on Kenya's Construction spree

In Kenya, local vehicle assemblers are tax exempted when they import complete knock down units into the country as opposed to the 25 percent import duty charged on complete car imports.

The tax exemption has motivated several vehicle assemblers such as Tata and Toyota to start importing complete knock down units. Toyota Kenya last year started assembling the Japanese Hino buses and trucks in Nairobi, their first foray into the heavy-duty commercial vehicle assembly market.

One of the latest entrants into the truck market is Hong Kong-based SinoTruk, which is being imported to Kenya by Nairobi distributor Stantech Motors.

Stantech, which opened shop in 1997 as a small repair garage in Nairobi's industrial area, is also the local distributor of other Chinese auto brands such as Chery Tiggo sports utility vehicles, Grand Tiger pickups, Golden Dragon vans and buses and Jiangling Motors Co double-cabin pickup trucks.

Chery Motors East Africa Ltd has assembly lines in Egypt and Nairobi to export cars to Libya, Sudan, Ethiopia, Ghana, South Africa and Algeria.

In March 2012, the company supplied the Kenyan police and provincial administration with 760 Chery Tiggo SUV vehicles. The SUVs came in handy during the 2013 general election when the Kenyan police faced a severe shortage of vehicles.

Another Chinese automaker making headway into the Kenyan market is AVIC International Beijing Co Ltd, which officially entered the market on Dec 12. The State-owned company based in Beijing formed AVIC-JAC Motors (East Africa) Ltd.

"Kenyan people are friendly and hardworking, and the political environment is good. The investment policy is superior, and the economy is growing fast and stable. It is a country full of hope," said Wang Guangjun, vice-general manager of AVIC International Beijing and chairman of AVIC-JAC Motors (East Africa) Ltd.

The company aims at expanding into the wider East African market that includes Tanzania, Uganda, Rwanda and Burundi in the near future by setting up regional production, sales, service and parts centers.

Wang said JAC plans to introduce pickups and heavy-duty trucks to enlarge its product portfolio and that JAC plans to start a local assembly line and set up a service technology training school to cover the East African region.