CFAO Mobility Injects Sh2.3 Billion to Launch Toyota Hiace Assembly Line at KVM Thika Plant

Kenya Vehicle Manufacturers scores a major win for local manufacturing with brand new Toyota Hiace assembly line in Thika. The launch of the new Toyota Hiace assembly line at Kenya Vehicle Manufacturers (KVM) production plant in Thika is a huge deal, marking the culmination of a Sh2.3 billion modernisation and expansion drive, fully funded by CFAO Mobility Kenya

The Sh2.3 billion investment is part of a larger modernisation and expansion project that will have a significant impact on how one of Kenya's most popular - and iconic - commercial vehicles makes it to our roads - going from being a fully built import to a locally made unit.

1. The Toyota Hiace - Kenya's Workhorse

The Toyota Hiace (also known as the Super Custom, Shark, or simply Matatu) is very much the workhorse of the Kenyan economy - and its popularity isn't hard to see. It is the backbone of three key sectors:

• Public Transport: The 14-seater long-distance matatus and shuttle saccos that operate nationwide can't do without it.

• Tourism: Customised tour vans that roam the Maasai Mara and Amboseli do - after all the golden standard for tourist transport.

• Logistics & Commercial: The go to panel van of choice for corporate distributions and e-commerce deliveries in Nairobi.

Local assembly of this particular model will not only tap into a high volume, guaranteed market but also cut down on logistics costs and transit times for local buyers.

2. Economic Impact - Creating Jobs, Skills and Value Addition

CFAO Mobility and KVM's Sh2.3 billion capital injection is designed to do more than just assemble car parts - it's about creating long term value in the industrial sector:

• Technology Transfer: The Thika plant is getting new, advanced technologies to meet strict global manufacturing standards, including new assembly jigs and robotic welding technologies.

• Employment Creation: The new line will also create hundreds of direct engineering jobs and thousands of indirect jobs in the local parts supply chain, including local manufacturers of batteries, paint and tires.

• Skills Development: Kenyan technicians are undergoing training frameworks with Toyota engineers, boosting local expertise in mechatronics.

3. A Windfall for the Government's Automotive Policy

This launch perfectly aligns with the State's ongoing National Automotive Policy which aims to phase out the importation of second-hand commercial vehicles and reward local assemblers.

Under the current tax regime, locally assembled vehicles like the new Thika-built Hiace get a 25% import duty exemption when they import completely knocked-down kits. This means locally assembled vehicles get a major pricing edge over fully built units imported from abroad, passing the savings on to local transport entrepreneurs.

4. KVM's Global Portfolio Expands

With the addition of the Toyota Hiace, KVM's Thika plant is now a multi-brand manufacturing powerhouse in East Africa. The facility is concurrently assembling vehicles for several major global brands across different segments:

• Passenger & Light Commercial: Volkswagen, Toyota.

• Heavy Commercial & Trucks: Mercedes-Benz, Tata, Sinotruk.

KVM Thika Plant Expansion Summary Table

The Big Picture: This move brings Kenya one step closer to becoming the automotive hub for the East African Community. By making a vehicle as mechanically rugged as the Toyota Hiace in Thika, KVM is setting the benchmark for industrial growth in the region.