Egypt-based firm to set up Kenya vehicle assembly
Egypt’s listed car dealer, Ghabbour Auto (GB Auto), aims to form a cooperative venture to produce and market passenger automobiles in Kenya.
The business made the declaration last week during a board meeting in a regulatory file to the Egyptian Exchange (EGX) reported by the Business Daily.
The business, which trades in cars, buses, trucks, and motorbikes, said its board of directors had authorized “the involvement in the foundation of a company in Kenya under the name of GB Automotive for automobile commerce and manufacturing”.
It produces, assembles, imports, and sells automobiles for Hyundai, Bajaj, Mitsubishi, and Volvo.
GB Auto engages in trading, distributing, and selling all vehicles including heavy trucks, semi-trucks, passenger cars, buses, agricultural tractors, and pick-ups.
The rich Ghabbour family of Egypt launched GB Vehicle, in 1985 and has a majority 62.9 percent share in the auto industry.
The business has since developed to become one of the largest automobile assemblers and distributors in the Middle East and North Africa and wants to expand outside the area, it said previously.
GB Auto has an exclusive arrangement to import and sell Japanese carmaker Mazda-branded automobiles in Egypt.
The firm also has an exclusive license from South Korea’s Hyundai Motor Company to produce and distribute Hyundai automobiles in Egypt.
GB Auto is also the only distributor and after sales service provider for China’s Chery-brand automobiles in Egypt.
Its Kenya expansion ambitions come at a time the government is prepared to exclude locally produced passenger vehicles from VAT and excise taxes, a move that may see costs of the autos plummet by hundreds of thousands of shillings.
This would see the automobiles spared from the complete principal tariffs that are applied on fully-built units imported from abroad markets like Japan, the UK, and South Africa.
Cars made overseas are charged an import duty of 25 percent, excise duty of 20 percent, and value-added tax of 16 percent, payable cumulatively and in that order.
Assemblers of passenger automobiles such as Simba Corp (manufacturer of Proton cars) and DT Dobie (Volkswagen) now receive exemption from the 25 percent import charge.
Sales for locally constructed cars surged to a record 70.6 percent of the overall sales in 2021, moving 10,054 units compared to 4,195 units of fully-built imported vehicles.
The primary assembly facilities include Nairobi’s Isuzu, Mombasa’s Associated Vehicle Assemblers (owned by Simba Corp), Thika’s Kenya Vehicle Manufacturers (owned by the government, DT Dobie and CMC Holdings) (owned by the government, DT Dobie and CMC Holdings).
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