Why lower car Import duties will improve the health, safety and economy for Kenya

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A traffic jam in Nairobi, Kenya. The city is the world's fourth-most congested, far worse than any in the U.S.

BY ROWAN BENN

Focusing on the short-term impact of the new car import duties misses some key long-term benefits for our health and wealth.

By harnessing the spending power of the wealthiest, 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.
The average car in Kenya is estimated to be 15 years old, making them costly to repair and lacking the latest safety features.

Many have been scathing towards the change in car duties as it allows the more expensive cars to become cheaper. Economies frequently use the spending power of the wealthy to help drive change through the whole country. The excise duty change is doing just that. The restricted choice of brands on our dealer forecourts should improve the choice of vehicles available over time. Coupled with that the availability of asset finance on UK imports for the first time, the car market is opening up for Nairobi and in time will become more affordable for all.

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.

Screen Shot 2016-03-03 at 11.34.29 AMThe 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%.

Screen Shot 2016-03-03 at 11.35.19 AMWhilst, not surprisingly older cars are more likely to crash

Screen Shot 2016-03-03 at 11.35.34 AMRestricted 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.

Asset Finance for Imported Cars

But until recently buying an imported car 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. They 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, and more economical for everyone.

Writer is marketing director MHH International Ltd

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