Italian automaker makes comeback with Sh2.3b assembly plant

Tax incentives are attracting automobile firms into the Kenyan market, with Italian automaker Iveco being the latest to set up an assembly line for light and heavy commercial vehicles.

Iveco is set to roll out its first locally assembled Trakker by July this year at its Sh2.3 billion plant in Mombasa in a partnership with Global Motors Centre (GMC).

GMC Managing Director Hussein Abadi said Thursday the plant will employ between 500 and 600 technicians, painters, and panel beaters.

The Italian manufacturer will have five lines, including the Eurocargo range, Trakker Tipper 380HP, Trakker Prime Mover 420HP, Daily Van, and Pick-up range almost 10 years since the Iveco Trakker rolled out of the industrial partner’s KVM factory in Thika.

Other players

Iveco, through TransAfricaMotors, will also open a showroom in Nairobi from where it will import a full-range demo fleet from next month.

“This announcement adds to the recent interest of other global vehicle assemblers that have entered the Kenyan motor industry, including Volkswagen, Peugeot, Tata, and Toyota, increasingly transforming Kenya into a global industrial vehicle assembly hub,” said the director of industrial information and research in the Industrialisation Ministry, Dr Joseph Kiplagat. He hinted that the country was mulling over gradually phasing out second-hand vehicles to create demand for the production uptick expected from the automakers.

“As part of developing the motor vehicle value chain, the EAC heads of states pronounced themselves to the phasing out of second-hand vehicles,” he said.

Kenya has been dangling incentives to motor vehicle makers, including committing the Government to buying at least 300 Volkswagen Polo Vivos a year, a sale that would represent 30 per cent of the company’s first year of output at its Thika plant, according to the Oxford Business Group.

The Government has also announced exemptions on tariffs applied to imports of unassembled vehicles.

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