How new ban has affected car prices

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By ANDREW BAGALA

Kampala. Owning a vehicle will become more expensive following the ban on importation of cars manufactured before 2003.
However, buses and heavy trucks of six-tonne capacity or more are exempted from the ban.
In June, Parliament passed a law that banned importation of cars manufactured earlier than 2003. The government says the cars emit toxic fumes into the atmosphere, which hurt the environment. The law took effect on October 1.

Toyota Hiace van models manufactured before 2002, which are often preferred by business people to serve as passenger taxis, are part of the banned vehicles under the new law.
Many cars dealers said the banned Toyota Hiace models, popularly known as kigege, are preferred because their prices are lower and they are easy to maintain compared to the new models.
Mr Iqbal Mudassar, a car dealer in Nakawa, said the prices of the banned Toyota Hiace models range from Shs38m to Shs50m while the model manufactured after 2003 costs Shs70m or more.

Expensive models
“The new Hiace models are expensive yet they are not durable and have problems with their engines. All our clients were buying the old Hiace models and sell them off to another user after three years. But the Hiace 2004 model, which is dubbed Drone, can only work for four years and it is wasted. Reselling it is very difficult,” Mr Mudassar said in an interview yesterday.

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Mr Mudassar said in a month they can sell 50 old Hiace models and only two new models.

Mr Mustafa Mayambala, the chairperson of the Drivers and Conductors Central Association, also reiterated the argument that old Hiace models are more durable than the new ones.

“We have to painfully turn to the passengers by increasing taxi fares because there is no way the owner of a new model [Hiace van] will recover his or her money is a short period,” Mr Mayambala said.
Mr Ali Sserwadda, the chairperson of car dealers at Jambo Automart, a car depot, said the ban has affected other types of cars such as Toyota Premio, Mitsubishi Canter Guts trucks and Toyota Super Custom.
“The car business has dropped drastically. We used to sell 80 cars a week, but we are now selling only eight in the same period,” Mr Sserwadda said yesterday.

He said most buyers of used cars pay in instalments and since the prices will go up for the new models, the business is likely to shrink.
“Most buyers pay 70 per cent instalment and take the cars. If a person has been paying 70 per cent on a Shs21m Toyota Premio old model, will he or she be able to pay the same instalment when the car is at Shs26m?” he wondered.
However, the ban has triggered a spill-over effect on the cost of other vehicles outside the 2003 bracket.
Prices for cars manufactured between 2004 and 2006 have also increased because they are still few on the market and there is speculation that they may be on high demand when the banned older models are sold out.

Monitor.co.ug

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