Tata draws up plans for Kenyan vehicle market
Posted on : Thursday , 11th December 2014
India’s Tata Group yesterday said it is in talks with partners in Africa to set up new assembly lines for commercial and passenger vehicles in Kenya and Tunisia.
Tata Motors head of international business R.T. Wasan said that the company will form alliances to sell commercial vehicles in Africa.
“We have identified a few partners in Tunisia and Kenya,” said Wasan. “They will be assembling our small, light and medium commercial vehicles and we are evaluating the options for Nano, the smallest car from the Tata stable.”
Wasan said it takes anywhere around $5-10 million (Sh428-Sh856million) to establish a joint venture for assembly operations.
Tata Africa Holdings managing director Raman Dhawan told Indian newspapers that new investments of around $1.7 billion(Sh145 billion) had been lined up for various projects by the group in Africa.
“The current revenue in Africa is around $2.3 billion (Sh196 billion), and we expect a growth of 30 per cent per annum on this,” Dhawan said. “Limitless investments are lined up for Africa in future as we are very upbeat about growth prospects there,”
Tata Motors has a commercial vehicles assembly plant in South Africa, and is planning to set up a bus body building plant through its global partner, Marcopolo.
Indian companies such as Essar, Bharti Airtel Ltd, Bajaj Auto Ltd and Tata Motors Ltd are investing in the continent to create new markets for their products.
India’s Commerce minister Anand Sharma said that the bilateral trade between Africa and India is expected to reach $100 billion (Sh8.5trillion) from the current $ 50 billion (Sh4.25 trillion) by 2015 and the target could well be achieved in 2014.
Although local assembly plants have a significant idle capacity, more global brands are venturing into the market to cash in on the regional demand using Kenya as their base.
Kenya Vehicle Manufacturer, Associated Vehicle Assemblers and General Motors East Africa are already established while new comers Hyundai Motor Company and Eicher Motors, Tata, Foton of China and Hino Motors are setting up or about to do so.
The assemblers are set to gain from friendly taxes on locally assembled units because imports of parts for local assembly are exempted from the 25 per cent import duty levied on fully built cars.
Kenya National Bureau of Statistics data shows that 5,456 vehicles were assembled in Kenya in the ten months to October 2012, a 52.3 per cent of the total 10,422 new vehicles sold in that period.
Source : businessdailyafrica.com
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