Kenya is seeking to turn vehicle waste into an economic opportunity under the proposed National Automotive Industry Development Bill, 2025, a far-reaching law that places sustainability and end-of-life vehicle management at the centre of the country’s automotive policy.
- •The draft legislation empowers the proposed National Automotive Council to promote sustainability initiatives across the sector, including the regulation of end-of-life vehicles.
- •According to data from the National Transport and Safety Authority (NTSA), about 30,000 vehicles on its database have been completely written off, highlighting a sizeable pool of decommissioned units with untapped economic value.
- •Under the Bill, such vehicles would be formally decommissioned and channelled back into the automotive value chain as a source of spare parts and steel for local manufacturing and assembly.
Beyond lowering input costs for assemblers, the sector is expected to generate new jobs, support small and medium enterprises, and improve environmental outcomes.
The sustainability provisions align with the Bill’s broader objective of strengthening Kenya’s automotive ecosystem through tighter regulation, research and development, skills training and targeted investment incentives. By formally integrating end-of-life management into law, policymakers hope to lay the groundwork for a circular automotive economy in which vehicles are designed, used, recovered and reused within a regulated system.
Cooling demand provides policy backdrop
The push comes at a time when Kenya’s car market is showing signs of cooling. Data from the Kenya National Bureau of Statistics (KNBS) shows that vehicle registrations peaked at 22,632 units in January before easing to 20,132 units in May, an 11 per cent decline over five months.
Motorcycles remain the dominant driver of the market, with registrations falling from 12,456 units in January to 10,588 units in May, underlining the continued influence of the boda boda economy as a source of affordable transport and instant employment. Station wagons, the second-largest segment, dropped from a peak of 7,398 units in April to 5,953 units in May.
Demand for more expensive personal and commercial vehicles has remained subdued amid tight household finances and shrinking access to credit. Analysts also point to the July 1 implementation of a new import duty computation model, the first update by the Kenya Revenue Authority since 2019, as a factor that may have temporarily pulled forward demand earlier in the year.
Saloon car registrations fell from more than 600 units in December last year to below 500 units in the first half of this year, while lorry registrations hit 600 units, the highest level in 12 months, reflecting relatively stable activity in freight and logistics. Buses, minibuses and wheeled tractors remained the weakest segments, each registering fewer than 200 units.
On the production side, local vehicle assembly has remained largely flat at about 1,000 units annually since 2022, with a 14 per cent drop in assembled units recorded between May and June this year.
