Honda Kenya Aims to Boost Local Parts Manufacturing

Honda Kenya is setting its sights on increasing local manufacturing of motorcycle components to better meet the substantial demand within the local and regional markets, which is estimated to be at least 1.5 million units. Chairman Dr. Isaac Kalua highlighted that with the right incentives, Kenya could become a competitive hub for motorcycle manufacturing and assembly.

“Currently, these parts are imported from other countries. Policy should drive a very smooth transition from importing these parts to making them,” Dr. Kalua emphasized during the launch of Honda’s latest motorbike, the ACE 150. The ACE 150, designed specifically for the Kenyan market, aims to strengthen Honda’s position as a leader in the boda boda and delivery segments of the transport industry.

At present, Honda Kenya imports 14 out of the 29 parts required for motorcycle assembly. Dr. Kalua noted that the company is collaborating with five local suppliers for these 14 parts, resulting in payments totaling Ksh 675 million over the past few years. He stressed the importance of government support to enhance the automotive industry’s capacity to generate substantial employment opportunities.

“Currently we are working only with five different local suppliers for the 14 parts. In the last few years that we have been working with them, Honda has paid Ksh 675 million to them,” Dr. Kalua stated. He called for enhanced government incentives to support the industry, which he believes has the potential to create at least five million jobs.

The latest motorbike, the ACE 150, is seen as a testament to Honda’s commitment to the Kenyan market. Naoki Suiko, Managing Director of Honda Kenya, described the ACE 150 as a product tailored specifically for Kenya, aimed at providing value to local customers.

“This product was genuinely produced for the Kenyan market. It is a one-country-oriented development, and I am confident it will give Kenyan customers value,” Suiko said. He also mentioned that Honda Kenya has invested at least Ksh 3.5 billion in Kenya, producing around 130,000 bikes to date.

The push for local manufacturing aligns with Honda Kenya’s broader strategy to leverage local resources and expertise, thereby reducing reliance on imported parts. This move not only supports the local economy but also enhances the sustainability and competitiveness of the automotive sector in Kenya.

By increasing local parts manufacturing, Honda Kenya aims to create a more resilient supply chain, reduce production costs, and improve the overall quality and affordability of its motorcycles. This initiative is expected to have a significant positive impact on the local economy by creating jobs, supporting local suppliers, and fostering technological innovation.

Moreover, Dr. Kalua pointed out the potential of the motorcycle industry to serve as a catalyst for broader industrial growth in Kenya. He urged policymakers to engage with current manufacturers to understand their needs and provide the necessary support to scale up production.

“Policymakers should sit down with the current manufacturers and ask them what they can do for them to continue producing more. You can support 15 percent of the manufacturers to create job opportunities for millions of people,” he explained.

Honda’s strategy to focus on the local production of motorcycle components is not only about meeting demand but also about creating a sustainable and self-sufficient automotive industry in Kenya. The company’s efforts to localize manufacturing are expected to set a precedent for other industries, demonstrating the benefits of local production and the importance of government support in achieving industrial growth.

In summary, Honda Kenya’s initiative to increase local parts manufacturing for motorcycle assembly is a significant step towards making Kenya a hub for the automotive industry. With the right policies and support from the government, this move could lead to substantial economic benefits, including job creation, reduced production costs, and a more robust local supply chain. As Honda continues to invest in Kenya, its efforts are likely to have a lasting positive impact on the country’s industrial landscape.