Miano signs deal with Toyota to save KVM |

ENTERTAINMENT

Kenya has inked a deal with Japan’s Toyota Tsusho Corporation to inject funding into the struggling Kenya Vehicle Manufacturers KVM) whose financial constraints have limited its production capacity.

This is one of the deals that Kenya inked during the G7 Session of Trade Ministers held in Osaka, Japan. Investments and Trade Cabinet Secretary Rebecca Miano on the sidelines of the summit revealed the deal with Toyota was meant to revive the company.

The Ministry did not, however, disclose the nature of Toyota’s proposed investment in the company and whether the deal is debt-based or an equity investment as well as the amount involved.

Ms Miano’s delegation included Industry Principal Secretary Dr Juma Mukhwana, Kenya’s ambassador to Japan Tabu Irina, while the Japanese delegation included Toyota Tsusho Corporation 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.

“Noting that the Kenya Vehicle Manufacturers (KVM), one of the local automotive assembling facilities in Kenya is experiencing financial difficulties, it was agreed that Toyota Tsusho, as one of the stakeholders in the industry, steps in to save the facility from eminent collapse,” said the Ministry in a statement.

The National Treasury is the largest shareholder of the Thika-based vehicle manufacturer with a 35 percent stake, while CMC Motors and DT Dobie each have a 32.5 percent stake in the company.

The company has been stuck in financial distress, with a National Automotive Policy submitted to Parliament last year revealing that KVM was the worst performing assembler in the country.

The assembler puts together multiple vehicle brands including those from Crown Motors (Nissan), PSA Group (Peugeot) and CMC Motors (Nissan Diesel, Eicher and MAN).

It also builds bodies for various commercial vehicle brands — Hyundai, Eicher, Isuzu, Mitsubishi, UD, Tata, Hino, Scania, MAN and Ashok Leyland.

During the summit, Ms Miano urged Japanese investors from Toyota Tsusho to leverage Kenya’s strategic posisyion and scale up local manufacture of parts and components for the company’s assembling facility in Kenya.

The Ministry agreed to expedite the finalisation of the automotive Bill and automotive regulations in collaboration with the industry stakeholders. The Bill and regulations will provide for End of Life Vehicle (ELV) recycling for both used cars and batteries.

It is estimated that over 70,000 vehicles are laying in junk yards after coming to the end of their useful life.

“The meeting advocated for a deliberate capacity building of the local manufacturers of parts and components to ensure that they can keep pace with the industry’s demands, with regards to the level of technology and volumes,” said the Ministry.

It also pledged to lobby for incentives by way of reduced duty on electric and hybrid vehicles in order to make them affordable to many.

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