Automotive Industry, Business

Why We Must Inject Integrity into the labyrinth of car Importation from Japan

A labyrinth is a com­pli­cat­ed irreg­u­lar net­work of pas­sages or paths in which it is dif­fi­cult to find one’s way. Thou­sands of Kenyans who have import­ed cars from Japan would agree that the process is indeed a labyrinth. I first expe­ri­enced this labyrinth 30 years ago when I bumped into an oppor­tu­ni­ty to import cars from Japan.

In 1994 while on a busi­ness trip to Tokyo Japan, I met Chan­dra Kumar, a Pak­istani nation­al who ran a car busi­ness known asKSK Cor­po­ra­tion. He per­suad­ed me to pur­chase from him 12 cars. He men­tioned that he had ini­tial­ly intend­ed to sell those cars to a cer­tain per­son in Kenya, who had chal­lenges pay­ing for them, leav­ing Mr. Kumar with no option but to sell them to me. After review­ing the doc­u­men­ta­tion, I was con­vinced that this would be a good deal for me. 

I returned home and per­suaded the Hon. Kalon­zo Musyoka togeth­er with his Part­ner and my friend Prof. Wambua Musili to guar­an­tee me a loan from the Bank of Bar­o­da to pay for the cars. The mon­ey was wired into the account of Mr. Kumar in Japan.He prompt­ly sent the log­books and the amend­ed bills of lad­ing to me. Upon reach­ing Mom­basa Port to clear my cars, I found that eight of them had long been auc­tioned at the port due to late clear­ance. Of course, Kumar had dis­ap­peared in the thin air! Con­se­quent­ly, I end­ed up los­ing my father’s land since the bank had to recov­er its money. 

In 2016, the Kenya Rev­enue Author­i­ty revealed that it was los­ing bil­lions to car­tels that had infil­trat­ed the vehi­cle reg­is­tra­tion process. Five years lat­er in 2021, the Kenyan office of Japan Exter­nal Trade Organ­i­sa­tion (Jetro) dis­closed how Kenyan importers were los­ing bil­lions of shillings through a fraud­u­lent impor­ta­tion process. Shock­ing­ly, on May 12, 2023while in Japan I vis­it­ed the Kenyan Embassy in Tokyo only to find how over­whelmed the team was with this wors­en­ing labyrinth of car importation.

But this run­away cor­rup­tion is not a Japan­ese prob­lem. In Japan, the sale of motor vehi­cles is strict­ly moral­ly reg­u­lat­ed. It only happens through four avenues: A deal between a will­ing indi­vid­ual who owns a car and is will­ing to sell to a buy­er, a car deal­er in Japan’s local mar­ket selling to an inter­est­ed buy­er, acar deal­er buying from indi­vid­u­als in the local Japan­ese mar­ket and selling to auc­tion hous­es, and auc­tion hous­es sell­ingvehi­cles to only auc­tion house accred­it­ed per­sons dur­ing a scheduled auc­tion. Any oth­er car pur­chases out­side these four cat­e­gories are done through bro­kers some of which are wild.

Japan’s auc­tion sys­tem is so strict that the auc­tion sheet or check­list clearly stip­u­lates the gen­uine con­di­tion of each car based on a fool­proof inspec­tion pro­ce­dure. This doc­u­ment is revered by car deal­ers as it helps them to nego­ti­ate for best prices dur­ing the auc­tion. Unfor­tu­nate­ly, once they pur­chase the cars, some deal­ers delib­er­ate­ly hide this doc­u­ment from their buy­ers to con­ceal seri­ous vehi­cle dam­ages which under­mine pric­ing. Fur­ther­more, wild deal­ers alter mileage read­ings and dis­hon­or­ably mask the integri­ty of the car before they present it to pre-ship­ment inspec­tion com­pa­nies. Sad­ly, there is no strict require­ment in Kenya as it is in some coun­tries for an authen­ti­cat­ed Odome­ter Integri­ty Inspec­tion and authen­tic­i­ty Cer­tifi­cate.

Here is my sug­ges­tion on how to sort out this mess. Since about than 98% of the cars import­ed from Japan orig­i­nate from auc­tion hous­es, the Gov­ern­ment should require that all car deal­ers attach an authen­tic trans­lat­ed auc­tion sheet. Sim­i­lar­ly, the odome­ter integri­ty cer­tifi­cate must be attached to the inspec­tion doc­u­ments and be made acces­si­ble to the end customer.

This is the only way to ensure qual­i­ty, fool­proof motor vehi­cle inspec­tion for both the importer and exporter. Fur­ther, the mea­sures will secure the vehi­cle import busi­ness, import tax rev­enue, road­wor­thi­ness of vehi­cles on our roads and ulti­mate­ly, the lives of Kenyan motorists. Think green, act green!

About Dr. Kalua Green

He is the Chief Stew­ard of Green Africa Group, a con­glom­er­ate that was envi­sioned in 1991 to con­nect, pro­duce and impact var­i­ous aspi­ra­tions of human­i­ty through Sus­tain­able Mobil­i­ty & Safe­ty Solu­tions, Eco­pre­neur­ship & Agribusi­ness, Ship­ping & Logis­tics, Envi­ron­men­tal Pro­tec­tion Ini­tia­tives, as well as Hos­pi­tal­i­ty & fur­nish­ings sectors

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