GM Kenya calls for higher taxes on used cars

June 8, 2009

, NAIROBI, Kenya, Jun 8 – General Motors East Africa Chief Executive Officer Bill Lay has urged the government to impose high taxes on second hand motor vehicles in the upcoming budget reading.

He said on Monday that other than reducing traffic jams in the Nairobi Central Business District, this will have a positive impact on the Public Service Vehicle sub-sector.

He however stressed the need for better management of the PSV industry.
“Most Kenyans do not really want to buy a car. They just need to get to work, and to get home and to shop,” he said.

What you need for that is a decent mass transit system and we have so many failed bus systems over the years in Kenya because of bad management and lack of leadership,” he added.

“The answer to that is a good Public Service Vehicle business.”

Mr Lay was speaking on Capital in the Morning where he said that the sale of the Hummer brand would not affect the distribution of the vehicle in East Africa.

“We are happy at General Motors that somebody is interested in buying the brand. Its one of the brands that General Motors decided that they were not going to support going forward due to their global issues,” Mr Lay explained.

“The good news is that buyers of the Hummer want GM East Africa to remain the distributor so our customers will not feel a thing,” he stated.

Mr Lay further said that the Bankruptcy Protection filed by its parent company in the United States had not affected the market of the motor industry in East Africa.

He said that the General Motors East Africa was independent and was also being funded by the Kenyan government.

“We have got a strong balance sheet. We sell Isuzu, commercial vehicles and we do not require funding. Our customers can still get credit,” the GM CEO stated.

“We are still able to go to a bank in the country and get a loan to buy a truck and that has been the big difference in the plans that General Motors was having,” Mr Lay explained.

GM had early this month filed for bankruptcy protection, a move once viewed as unthinkable that became inevitable after years of losses and market share declines capped by a dramatic plunge in sales in recent months.

The bankruptcy is likely to lead to major changes and job cuts at the battered auto – maker.
But President Barack Obama and GM CEO Fritz Henderson both promised that a more viable GM will emerge from bankruptcy.
The US government will pour another $30 billion into GM to fund operations during its reorganisation.

GM will shed its Pontiac, Saturn, Hummer and Saab brands and cut loose more than 2,000 of its 6,000 US dealerships by next year.


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