Vessel scarcity hits car imports as 2013 units deadline nears - Beaking Kenya News

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Friday, 20 November 2020

Vessel scarcity hits car imports as 2013 units deadline nears

 

Car importers are worried hundreds of 2013–manufactured vehicles could be locked out of Kenya under the eight-year rule, leading to loses running into millions.

This is due to a scarcity of vessels in the leading import source market of Japan which accounts for 80 per cent of second–hand units coming into the country.

There is also a shortage of ships in Europe and other key market sources, the industry lobby–Car Importers Association of Kenya (CIAK) has said.

This it is concerned, is likely to delay shipments for units purchased in the third quarter (October-December) of this year.

Shipping transit times between Japan and Mombasa are between 26 to 30 days, while sailing from Europe can take between 20 and 40 days depending on the departure and destination ports as most vessels call at a number of other ports on their way to Kenya.

 The last day for 2013 manufactured vehicles to be cleared into the country under the age limit rule is December 31, meaning importers have 42 days to ship in all their units falling within the cut off date.

“There is a problem of getting vessels in these markets and many people may be affected by this. We are likely to see a lot of vehicles locked out of the December deadline,” CIAK national chairman Peter Otieno told the Star in a telephone interview yesterday.

At least six ships carrying motor vehicles are expected to dock at the Port of Mombasa between Saturday and December 3.

The number of imports in the last quarter of the year have traditionally risen based on last minute orders, where prices of these vehicles are lower compared to January, as sellers move to secure the Kenyan market before the eight-year rule deadline.

According to industry trends, imports between January and March average 3,000 to 4,000 before picking up to 9,000 in the second half of the year.

Normally between November and December, vehicles coming in are not less than 13,000, importers say.

The numbers can go up to 15, 000 units. For instance last year, monthly imports hit a high of 20,000 in December.

“People have made orders but there are no enough ships. There is going to be a problem,” Otieno said.

Apart from Japan and United Kingdom, Kenya's other top market source for used vehicles are United Arab Emirates,Singapore and South Africa.

Importers have for the last five years beaten the eight year rule deadline where the Kenya Bureau of Standards has been strict in effecting the  government's age limit policy, which restricts importation of vehicles that are more than eight years old from the year of manufacture.

The last time a major hiccup was witnessed was in 2014 when more than 2,000 units registered in 2006 were locked out of the country after arriving later than December 31, leading to losses of millions of shillings by dealers and individual importers.

Second hand cars dominate the local market with buyers in this segment spending an estimated Sh60 billion annually on the units, whose prices range from as low as Sh500,000 to an average Sh2.5 million.

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