Unlocking East Africa’s export potential in car assembly business

East Africa's local automotive industry is experiencing rapid growth, driven by favorable policies that offer tax incentives and lower tariffs to encourage investment in the car assembly business. In a recent exclusive interview, Rita Kavashe, the Managing Director of Isuzu Motors East Africa Limited, shed light on the opportunities in the region and the transition towards electric vehicles (EVs). The automotive sector in Kenya has historically lacked a regulatory framework to support its growth. However, in 2020, the government approved the automotive policy, which introduced key incentives such as the exemption of import duty for semi-knocked down kits, leading to a surge in locally produced vehicles. This shift has seen a significant increase in the number of vehicles assembled in Kenya, with a notable 84% of new vehicles now being locally manufactured. As a result, more original equipment manufacturers (OEMs) and assemblers are setting up operations in the country to take advantage of these incentives. Isuzu Motors East Africa has been proactive in championing environmental sustainability and power efficiency. The company is focusing on research and development (R&D) to adapt its vehicle models to meet the evolving regulatory landscape, particularly in transitioning from euro zero to euro four emission standards for cleaner vehicles. In line with its global vision, Isuzu Motors East Africa is investing in the development of EV technology to align with market trends and regulatory requirements. The company has already begun testing EV vehicles in various markets, with plans to introduce EV testing in Kenya by 2025. To address the challenges of affordability and infrastructure readiness for EV adoption in East Africa, Isuzu Motors East Africa is exploring different technologies, including hydrogen fuel cells, to cater to diverse market needs. While the adoption of EVs in the region is still in its early stages, key infrastructural considerations like charging infrastructure, cost, and regulatory frameworks need to be addressed to drive mass adoption. Rita Kavashe emphasized the importance of clear regulations around EV ownership and financing, especially for commercial vehicles, where innovative solutions like 'swing batteries' could enhance operational efficiency. Despite the current infrastructural limitations, there is growing interest in clean energy solutions among customers, signaling a potential shift towards EV technology in the future. Isuzu Motors East Africa aims to introduce EV products to the market by 2030, paving the way for a greener and more sustainable automotive industry in East Africa.