CFAO Motors Kenya has cut the price of its Toyota Fortuner sport utility vehicle (SUV) to Sh11.5 million from the previous Sh13.2 million, benefitting from tax exemptions on local assembly.
Vehicle parts headed to assembly plants are exempt from the 35 percent import duty, giving them a price advantage in a policy designed to encourage local production.
Vehicles shipped in fully built from overseas markets like Japan, the UK, and South Africa are charged an import duty of 35 percent, excise duty ranging from 25 percent to 35 percent, depending on the size of the engine and value-added tax of 16 percent. The taxes are paid cumulatively and in that order.
CFAO Motors started assembling the Toyota Fortuner (automatic diesel) models at the Mombasa-based Associated Vehicle Assemblers (AVA) at the end of July.
The dealer imports semi-knockdown (SKD) parts of the vehicle including the welded and painted body. Other parts such as wheels and batteries are then put together at the assembly plant.
CFAO Motors expects the price cut to lift sales of the model which stood at 45 units in the six months to June.
