Nissan to set a Car Assembly Plant in Kenya

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The Japanese automotive giant Nissan plans to install pickup assembly units in Kenya. An implementation conditioned by the abandonment by the Kenyan authorities of an import tax of 25%. The manufacturer also plans to use existing units to mount its vehicles.

The Japanese automaker Nissan plans to install a vehicle assembly unit in Kenya. A decision welcomed by the Kenyan presidency, as this announcement is part of the government’s vision to make Kenya a regional hub for automotive manufacturing.

The country seduces builders

The interest of the Japanese group for Kenya comes after the announcement by other manufacturers of their intention to establish in the country, including Volkswagen, PSA or CNH Industria who confirmed the establishment of assembly lines in Kenya. last 18 months. The introduction of its units could drive down new vehicle prices in the markets of the continent’s fast-growing economies, where the vehicle ownership rate per thousand people is one-quarter of the world average.

The car manufacturing industry remains embryonic at the continental level, while the market remains dominated by the sale of imported second-hand cars and the scarcity of financing options or the poor condition of the road networks are obstacles to the market. new. In Kenya, sales of new vehicles fell by 20% in 2017, or 11,044 units.

Implantation subject to condition

Nissan compte ainsi démarrer son implantation au Kenya par la mise en place d’unités d’assemblage de pick-up en kit semi-démontés (SKD). Un projet que le management du constructeur nippon a conditionné par l’annulation d’une taxe à l’importation de 25% par Nairobi. En cas d’accord, Nissan compte disposer d’une chaîne de montage opérationnelle d’ici à la fin 2019. Le management du groupe compte établir cette unité dans une usine qui sera réaménagée, ce qui permettrait de limiter les frais d’installation à 20 millions de dollars.

The investment in technology and industry is estimated at $ 100 million by the company which specified in passing that a new plant would cost twice that amount. Management plans to use facilities owned by Isuzu East Africa, Associated Vehicle Assemblers, Kenya Vehicle Manufacturers (JV between the government and Toyota) and Al Futtaim Group. From Kenya, Nissan plans to supply the entire East African market and compete with imports of light trucks from South Africa or Japan.

Nissan, which has assembly units in South Africa and Nigeria, plans to take advantage of the popularity of Kenyan buyers for pickup trucks, which account for 12% of vehicles sold in the local market. The country could eventually serve as a stepping stone for the manufacturer to reach the Ethiopian and Zimbabwean markets, countries that could also host, in the future, new assembly units.

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