Africa Automotive News September-October digital issue 2019

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News EAC locks out duty-free car imports from South Africa at the Comesa Secretariat. Currently, finished goods imported into the EAC attract a duty of 25%, intermediate goods (10%) and raw materials (0%) under the EAC’s existing three-band tariff structure which came into effect on January 1, 2005. Moreover, there is a list of sensitive products such as milk, sugar, wheat, rice and garments which attract higher duty of above 25% to protect such industries from competition. Players in the automobile sectors from the East African Community and the Southern African Customs Union are developing a joint policy to encourage motor vehicle manufacturing that is beneficial to both blocs. This development comes at a time when the tripartite free trade area (TFTA) tariff negotiations launched more than four years ago are near conclusion. The two economic blocs have had a prolonged battle over whether to abolish the contentious 25% import duty under the tripartite free trade area (TFTA). The two blocs have agreed that import duty on some motor vehicle parts will be abolished within the first five years of the TFTA, and others will enter duty free as provided under the EAC CET. The move ostensibly curbs a massive influx of motor vehicles from South Africa into the EAC region once the more than 700 million-people TFTA comes into force. It is estimated that the number of vehicles imported into East Africa each year has grown to over 250,000 and is expected to reach 500,000 by 2030. Car Industry As a result, member states — Rwanda, Burundi, Uganda, Kenya, Tanzania, and South Sudan — are pushing for the growth of the automotive assembling industry in the region. “Automobile industry players in the two regions are involved in development of the strategy,” said Benedict Musengele, acting director general in-charge of customs and trade Last year, the EAC heads of state directed the Council of Ministers to explore the possibility of developing the automotive industry by reducing importation of used vehicles from outside the region and thereby make the region more competitive. These countries are also tightening rules on the importation of second-hand cars into the region as part of efforts to encourage local assembly. For instance, in 2017 the EAC Council of Ministers recommended to the 18th EAC Heads of State Summit that the age limit for used imported vehicles be lowered to five years by 2021. Kenya currently allows the imports of used cars with of up to eight years, 15 years in Uganda, and 10 years in Tanzania. Burundi, Rwanda and South Sudan have no age limits for used cars. Value chain Kenya has three assemblers — Kenya Vehicles Manufacturer, Isuzu and Associated Vehicle Assemblers. They assemble their cars from “completely knocked down units” that attract zero duty as per the CET. However, if they import “completely build units” they pay applicable duty as per the CET. Continue Reading Online. Scan Below..... 6 Africa Automotive News l 2019 September-October issue l 2019
News Isuzu Motors to set up assembly plant in Ethiopia Isuzu targets to introduce additional models including medium and long buses for public transportations whilst one more dealer is expected to join the business, Kessate- Berhan said. Isuzu Motors is set to establish an assembly plant in Ethiopia via Japanese based Itochu Corporation. The assembly plant is expected to be in operation within the next 2 years but the prototype plant of the plant will be finalized by the end of 2018, with some knocked down units already being ordered for shipments. Kessate-Berhan Mengiste, the automobile section manager with Itochu Corporation told the Ethiopian dailies that the trending changes and growth of Ethiopia is attracting the likes of Isuzu. He argues that the momentum in Ethiopia ignited the increase of Isuzu-Itochu presence. National Motors Corporation (NMC) and Kaki PLC have joined in the dealership Isuzu targets to introduce additional models including medium and long buses for public transportations. NPR and FSR Isuzu truck series are widely used in Ethiopia. However, FVR 23 and FVR 33 trucks which are believed to be handy for bottling companies are to be made more available in Ethiopia. Annual sales of Isuzu trucks have reached 800 units an increase of 96 percent from the previous years. Other indirect imports that are mostly sourced from Dubai to reach up to 3,000 units. September-October issue l 2019 Africa Automotive News l 2019 7
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Page 3 and 4: Contents Managing Editor Francis Da
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Page 45 and 46: 1. Staying calm • Experts agree t

Africa Automotive News September-October digital issue 2019

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