Thursday, January 16, 2025

Kenya’s Second-Hand Car Importers Face Major Losses Amid New Regulations

Money & Market


Second-hand car importers in Kenya are bracing for substantial losses as they race against the clock to clear vehicles before new government regulations take effect at the end of the year.

Starting January 1, 2025, the Kenya Bureau of Standards (Kebs) will enforce a stringent eight-year age limit for imported used vehicles. This means that only right-hand drive vehicles first registered on or after January 1, 2018, will be allowed into the country.

The new rules, aimed at improving road safety and reducing the influx of older, high-maintenance vehicles, have sparked panic among importers who are now scrambling to clear cars that fail to meet the new requirements.

These vehicles, many of which were registered in 2017 or earlier, must be processed and cleared by customs before the deadline to avoid being banned from entry.

Importers are now grappling with delays caused by shipping disruptions in key transit routes, including the Red Sea. With extended transit times, some importers fear that their shipments may not arrive in time to meet the cutoff, putting them at risk of heavy financial losses.

“The situation is dire. We have vehicles stuck in transit, and there’s no guarantee that they’ll make it in time.

The new rule has created chaos in the market,” said a representative from the Car Importers Association of Kenya (CIAK). The association has been vocal about the government’s decision to impose the new rules without adequate consultation with industry players, leading to heightened uncertainty in the sector.

Some industry players are calling for the government to offer a grace period for vehicles already cleared by Kebs or to allow imported vehicles to be registered beyond the December 31 deadline. There is even talk of possible legal action should the government not reconsider the implementation timeline.

Historically, Kenya’s second-hand car market has faced similar challenges. In 2014, thousands of vehicles registered in 2006 were blocked from entry due to similar age restrictions, creating massive losses for importers.

The latest regulatory changes come as the second-hand vehicle market continues to grow, with many Kenyans depending on affordable used cars due to high prices for new vehicles. However, these new rules are expected to push up the prices of used cars and reduce the availability of affordable options for the public.

As the deadline approaches, importers are racing to clear as many vehicles as possible, but many are uncertain about how much longer they can continue to absorb the costs of delayed shipments.

The coming weeks will be crucial in determining the fate of the used-car industry in Kenya and the thousands of businesses reliant on it.

The situation remains fluid, and stakeholders are calling for urgent dialogue with the government to mitigate the economic fallout that could ripple through Kenya’s automotive industry.

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