Nissan Decides to Establish Assembly Plant in Kenya

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Japanese car giant Nissan is to build a new assembly plant in Kenya to serve the regional market in an initial investment worth $20 million. This will be its third plant in the continent after South Africa and Nigeria.

According to Bloomberg, the automaker is currently conducting a market study to gauge the viability of the venture after which they will apply for necessary approval from the Govt. The facility would be operational by the end of 2019 if approval is granted on time.

In the first year of operations, Nissan said the new plant will assemble pick-up trucks from semi-knocked-down kits. Nissan’s director of Africa operations Jim Dando further said that they expect the Govt to grant them an import tax waiver of upto 25 percent.

“We’re prepared to enter Kenya as an SKD assembler and we’re keen to move quite fast. We want to make this happen.” Jim Dando said.

Investing in an existing plant for completely knocked-down kits, or CKD, would require as much as $100 million while a new factory would cost double that amount. Nissan prefers starting with half-finished vehicles as it builds market share and a skilled workforce, Dando said. – Bloomberg.

He further noted that they would consider processing Nissan vehicles at plants owned by Isuzu East Africa, Associated Vehicle Assemblers (a product of Simba Corp), and Kenya Vehicle Manufacturers which is owned by the Govt, Toyota Tsusho and Al-Futtaim Group.

Meanwhile, the number of brand new vehicles sold by dealers and manufacturers in Kenya dropped to an eight year low of 10,722 units in 2017. This marked a drop of 20.7% compared to 13,535 units sold in 2016.

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Source: http://kenyanwallstreet.com/

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