Toyota partners with Miano to rescue KVM

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【Summary】Kenya has signed a deal with Toyota to provide funding for struggling car manufacturer Kenya Vehicle Manufacturers (KVM). The exact investment amount and nature of the deal have not been disclosed. The National Treasury, CMC Motors, and DT Dobie are currently shareholders in KVM. This deal was made during the G7 Session of Trade Ministers in Japan. Kenya also plans to expedite the finalization of the automotive Bill and regulations to support the industry.

FutureCar Staff Oct 29, 2023 11:25 PM PT

Toyota partners with Miano to rescue KVM

Kenya has recently signed a deal with Toyota Tsusho Corporation of Japan to provide funding for Kenya Vehicle Manufacturers (KVM), a company that has been facing financial constraints and limited production capacity. This agreement was made during the G7 Session of Trade Ministers held in Osaka, Japan. The aim of the deal is to revive the struggling company, although specific details about Toyota's investment and the amount involved have not been disclosed by the Ministry.

The Kenyan delegation, led by Investments and Trade Cabinet Secretary Rebecca Miano, included Industry Principal Secretary Dr Juma Mukhwana and Kenya's ambassador to Japan, Tabu Irina. On the Japanese side, the delegation included Toyota Tsusho Corporation's president and CEO, Ichiro Kashitani, Kashumasa Kimura, the COO of Toyota Tsusho Africa Division New Business Development, and Uchikoshi Fumihiro, Second Secretary of the Japanese Embassy in Nairobi.

The Ministry stated that the decision to involve Toyota Tsusho in saving KVM from collapse was made due to the financial difficulties faced by the local automotive assembling facility. The National Treasury holds the largest stake in the Thika-based vehicle manufacturer, with a 35 percent ownership, while CMC Motors and DT Dobie each have a 32.5 percent stake.

KVM has been struggling financially and was identified as the worst performing assembler in Kenya in a National Automotive Policy submitted to Parliament last year. The company assembles vehicles from various brands such as Crown Motors (Nissan), PSA Group (Peugeot), and CMC Motors (Nissan Diesel, Eicher, and MAN). Additionally, KVM also builds bodies for commercial vehicle brands including Hyundai, Eicher, Isuzu, Mitsubishi, UD, Tata, Hino, Scania, MAN, and Ashok Leyland.

During the summit, Ms Miano urged Japanese investors from Toyota Tsusho to take advantage of Kenya's strategic position and increase local manufacturing of parts and components for the company's assembling facility in Kenya. The Ministry has committed to expedite the finalization of the automotive Bill and automotive regulations in collaboration with industry stakeholders. These regulations will include provisions for End of Life Vehicle (ELV) recycling for used cars and batteries, as it is estimated that over 70,000 vehicles are currently lying in junk yards after reaching the end of their useful life.

The Ministry also expressed its support for capacity building of local manufacturers of parts and components, ensuring that they can meet the industry's demands in terms of technology and volume. Furthermore, the Ministry pledged to advocate for incentives such as reduced duty on electric and hybrid vehicles to make them more affordable to the public.