New car dealers want used motor vehicles phased out

By Edward kayiwa

As Uganda prepares to launch its first locally manufactured automobile to the market in 2018, new car dealers have appealed to the government to begin phasing out the importation of used motor vehicles on the market.

According to the dealers, the market needs to purchase at least 4,000 new vehicles per year for any manufacturing or assembling plant to expect break even.

However, according to statistics from the Uganda bureau of statistics (UBOS) the Ugandan market only absorbs about  2,500 new vehicles per year.

“Most people in the country are used to buying used, environmentally unfriendly, vehicles that are imported into the country quite cheaply. But if we expect to replace them with our own locally manufactured vehicles, we need to prepare the market now by phasing out importation of used vehicles,” said Karim Shehata, MAC country sales and marketing manager.

Shehata was speaking on the sidelines of the launch of the Isuzu sales & service campaign at the MAC offices on Old Port Bell Road recently.

He said the development of the automotive industry in Uganda has a positive multiplier effect to the entire EAC, as well as the welfare of the citizens, if government takes proper initiatives to facilitate its growth.

Earlier in February, during the sixteenth summit of the East African Community heads of State held in Kenya, the five regional leaders proposed a ban on the importation of used vehicles.

According to a joint statement they issued, the leaders directed the Council of Ministers to study modalities for the promotion of motor vehicle assembly with a view of stopping or reducing the importation of used vehicles in East Africa.

Tim Mwambire, the MAC country manager said the current market is too small to sustain manufacturing and assembling in the region.

“We assembles 4,000 units of Isuzu in Kenya for example, 2,500 of which are fed into the Ugandan market. None of the two countries is able to consume the entire production on its own,” he said.

He observed that because of the thin market, investors such as MAC East Africa and the Kiira motor corporation have been forced to build one central investment to serve the entire region.

However, Malik Azhar, the chairman of the Uganda Used Car Dealers’ Association, said in an interview that the ban is not necessary considering that the two sectors serve different classes of people in the region.

“Our customers cannot definitely afford new vehicles because they are too expensive. Our market has not affected in any way the market for new vehicles and is not likely to do so in a very long time. We have also improved the conditions and the age for our cars so they are no longer a danger to the environment,” Malik said.

MAC East Africa is the authorized automotive dealer of the Isuzu and Chevrolet brands in East Africa.