Companies in Kenya involved in importing finished vehicles have expressed their opposition to a series of new charges being levied by the Kenya Ports Authority (KPA). Their industry body, the Car Importers Association of Kenya, is demanding an urgent review of the price hikes, pointing out that higher prices will cause losses since they will push up the cost of doing business.
In a letter sent KPA's managing director, Gichiri Ndua, the association pointed out that there had been complaints from the general membership, stressing that “they are not ready for these charges”.
According to the association’s chairman Peter Otieno, the new tariffs are already hurting Kenya's automotive sales. “The KPA chairman and the government said they want to make the port cheaper in terms of doing business and boosting the country's economy,” he said. “What they are doing now is the exact opposite.”
The new tariffs, which came into effect from August 1, increased the shore handling charge for vehicles not exceeding 1.5 metric tonnes from $80 to $83 per unit. Within this group are saloon cars, estate cars, vans and crossover utility vehicles. In addition, wharfage charges, which are levied directly by the port, have risen from $65 per unit to $67.
Nevertheless, KPA has reduced shore handling charges for vehicles not exceeding 10 metric tonnes – this includes buses, trucks, tractors and light folk lifts - from $665 to $580. Rates for construction, industrial vehicles and heavy duty lifting equipment over 10 metric tonnes has also been reduced, from $1,065 per unit to $950. In this same category, rates for units over ten metric tonnes have dropped from $775 to $700 per unit.
Despite this mixed charging policy, Otieno emphasised that the market for vehicles not exceeding 1.5 metric tonnes is much larger, with the price hikes therefore damaging that business.
"We now import about 12,000 vehicles per month, up from 9,000 last year. Why increase the small units and reduce the bigger ones? It doesn't make sense. The increase will discourage dealers from the business.”