However, while the vehicle's development and production by local engineers and suppliers represents a milestone for Uganda's nascent heavy manufacturing industry, we stress that the project faces a number of significant risks to its commercial success. From an operational perspective, the limited availability and reliability of electricity, and limited availability of skilled labour will keep manufacturing costs substantially high for KMC compared to producers elsewhere in the East Africa region. Furthermore, the Ugandan new vehicle market remains far too small to absorb the company's planned output, raising the costs for the producer to engage in costly marketing and export operations elsewhere in the East Africa Community (EAC) region. As a result, we believe that Kenya will still remain the EAC region's main production hub for new vehicles

Source : www.autosinsight.com