M a r k e t N e w s

Cost of importing used cars into the region set to increase by 5pc

Posted on : Tuesday , 14th July 2015

The cost of importing used motor vehicles into East Africa will go up by five per cent from next month after EAC ministers adopted new car importation and valuation rules.

The ministers agreed to enforce the new rules, including standardised depreciation rates with effect from July 1.
In the new rules the depreciation rate for all motor vehicles imported to the region will range from 20-80 per cent (which is five per cent lower than the current depreciation rate) depending on the age of the vehicle from the date of registration.
According to the new rules, for a car that is more than a year old and less than or equal to two years from the date of manufacture, the depreciation rate (cost and freight) will be 20 per cent of the local retail price while for a car that is more than seven years and less than or equal to eight years, the depreciation rate will be 65 per cent.
“Although this lowers the depreciation rate by five per cent from the current rates, it will effectively increase the cost of importing a car into the country,” said Charles Munyori, the secretary-general of Kenya Auto Bazaar Association (Kaba).
In Kenya, for example, if a buyer is importing a Toyota model from Japan that costs Ksh2 million ($20,199) at Toyota Kenya, the old model will now cost Ksh700,000 ($7,069) instead of Ksh600,000 ($6,059) minus the duty.
“The aim of the harmonisation is to address distortion of the trade in used motor vehicles between partner states and also to create fairness for consumers of used motor vehicles in the region,” said the EAC ministers.
The new rules have been benchmarked with those of other countries like Ghana, Ethiopia and Sri Lanka. 
EAC partner states have different valuation methodologies for used motor vehicles.
Kenya and Tanzania use almost similar valuation methods that involve determining the current retail selling price for the brand new motor vehicle in the domestic market.
From that price, the post-importation charges, which include duties, taxes and the profit margin, are deducted and thereafter the Customs value is derived based on the depreciation rate provided in the approved depreciation schedules. The current retail selling prices are obtained from the local motor vehicle dealers.
The depreciation schedule for Kenya provides up to a maximum of 70 per cent for eight years from the date of the first registration of the used motor vehicle; whereas that for Tanzania provides up to 80 per cent with no limit on the number of years. However, the Tanzanian methodology considers the year of manufacture.
Rwanda uses the previously accepted Customs value and Internet sources to determine Customs values for used motor vehicles.
Uganda uses a reference value guideline derived from the average market prices of used motor vehicles from Internet sources adjusted with freight and insurance to determine the Customs value.
However Uganda is in the process of developing a valuation system based on free on board (FOB) prices of brand new motor vehicles as at the time of manufacture sourced from manufacturers or their appointed representatives.

Source : theeastafrican.co.ke
Featured Companies
  • Bajaj Auto
  • Nissens A/S
  • Bajaj Auto
  • Tire Group International, LLC.
  • dubaiexporters.com
  • Steelmate - Think safety think Steelmate

Complete List  

Advertisers in previous issue:

  • GARAGE 1 has been purchasing cars, trucks and jeep in order to recuperate esclusively top quality used complet engines, gearboxes and mechanicals parts.
  • Meizhou Jinda Auto Parts Co.,Ltd. is a state-owned enterprise ,specializing in manufacturing auto clutch disc and brake.
  • TOTACHI INDUSTRIAL CO. LTD is an esteemed Japanese company that provides a comprehensive range of lubrication products for commercial and consumer applications.
  • High quality spare parts for truks
  • Best Choice International Trade is one of the leading tyre exporter in China, and a major supplier of tyres and engines in Beijing Municipality.
  • Pensol Industries Limited has a wide range of products, both in Automotive and Industrial lubricants
  • Exporters of Genuine & Non Geuine Parts for Japanese Cars.
  • Lanfeng machine Co., LTD is a collection of R&D, production and sales of Fuel dispenser and LPG dispenser, gas station equipment of large enterprises in China.
  • Leading Dealers,Wholesalers & Retailers Specially For Nissan,Toyota & All Japanese Car Genuine Spare Parts.
  • JINGZHOU JINGFU AUTO PARTS CO.,LTD , a Taiwan & Hubei joint venture, is focusing on manufacturing and supplying professional suspension parts.
  • Tyre makers.
  • Rolman World is one of the largest and most established distributors of bearings and related technical services in the Middle East and Africa.
  • Fuel Saver
  • Zhenjiang Huixiang Light&Electrical Co.,Ltd.), which located in Zhenjiang, Jiangsu Province of China, specialize in producing auto&motorcycle bulbs.
  • Al Maroof Trading Company is one of the leading Auto Parts Dealers based in UAE and Pakistan.
  • Bearings
  • Auto Parts
  • Yellow stone diesel-One of the leading manufacturers of engine parts.
  • Dealers of Honda,Yamaha,Suzuki.
  • Car garage equipment
  • Boston Garage Equipment Ltd is a leading suppliers of a superb range of vehicle workshop equipment.
  • TOMAD International, Inc. is an export management company specializing in sales and marketing within the Middle East and Africa region.
  • Pro Media is established by a group of advertising sales people who have had over 25 years of experience in Taiwan’s two-wheeled industry.
  • It is the largest manufacturer of Premium Quality Lipe brand clutches for the commercial vehicles in India.
  • Cylinder heads
Afrotrade International Marketing, Tel: +971-50-6285684
© 1998-2020 Afrotrade