Importers and dealers of second-hand cars in Kenya are rushing to place early orders for vehicles manufactured in 2017, aiming to beat the country’s eight-year rule on used car imports. However, they remain concerned about disruptions in global shipping caused by attacks from Houthi rebels in Yemen’s Red Sea, which are targeting foreign vessels. This has forced major shipping lines to re-route their vessels away from the Red Sea and Suez Canal, resulting in longer delivery times.
Dealers are also raising issues with the Kenya Revenue Authority’s (KRA) vehicle valuation practices, which they argue are unpredictable and lack transparency. Peter Otieno, the national chairman of the Car Importers Association of Kenya (CIAK), stated, “The landing cost of a vehicle is not predictable, making it risky for sellers to seal deals with customers before importation.”
This uncertainty is expected to negatively impact imports, which are projected to decline for the third consecutive year. So far, only 41,000 units have been imported in 2024, a continued drop from previous years. The Economic Survey 2024 shows that used car imports fell to 78,127 units in 2023, an 11% decrease from the 87,648 imported in 2022. In 2021, 103,859 units were imported.
The decline in imports is also attributed to KRA’s shift in taxation policies for second-hand vehicles. Under the new system, cars imported throughout the year pay the same taxes as those brought in during January, whereas previously, taxes were determined by the month of registration. This change has made late-year imports less attractive, reducing monthly second-hand car imports from the typical range of 5,000 to 7,000 units to below 3,000.
