Importing a car from Japan

There are three main sources of used cars for the Kenyan market, Japan, Dubai and Singapore. Japan is the most popular and reliable source, thanks to the fact that the cars are clean and in relatively good condition. The process is also transparent. Previously, Dubai and Singapore were popular sources of the used cars. Dubai lost out after claims that most of these cars are first stolen from Japan, while Singapore had quality issues. More than 90 percent of the used imports now come from Japan.

Importing a used car is an easy do-it-yourself process. From the comfort of your office seat, you can buy a car straight from Japan and have it delivered to your parking lot. The process takes 30-45 days. Below is a step by step guide.

Know what you want
As with the other ways of buying a car, the first step is to identify exactly what you want. List down the extras, transmission, colour, mileage….. This will help narrow down your search and save you time roaming the internet. Just because Japan is home to Toyota, Subaru and Mitsubishi does not mean the makes are their only mainstay. If you fancy a Lamborghini or Ferrari, you can get it here too. But as a basic rule, choose a car that’s suitable for our roads and climate. This will minimise your expenses on tropicalising the car.   

Identify your Source
Buying a car through the web has three dimensions: Logging onto a website and purchasing from any of the models posted, bidding online from any of the auctions in Japan and placing an order through the exporting companies. Most Kenyans use the first method. According to the Japanese Chamber of Commerce and Industry, the main used car dealers that export used cars to Kenya are in Tokyo, Kinki, Nagoya, Okinawa and Tohoku. These are regulated by an umbrella body, the Japan Used Motor Vehicle Exporters Association (JUMVEA). It’s JUMVEA that arbitrates any would-be disputes between you and the car exporter.  The members of the umbrella body are listed on the website www.jumvea.or.jp. Some of the websites have specific web pages for Kenyan customers, whereby they only list cars manufactured after year 2001 and the most popular makes and models. If you don’t get the car you are looking for, you can request from any of these companies via email. Buying from auctions (USS, held every day and Global Online held every Monday) often entails sending a deposit to get a bidding number.

Ascertain quality
The quality of the used cars is normally graded to the scale of 10. Most of the suppliers will give you a separate grading for the tyres, interior, body work and engine. If the overall grade is above 4.5, the car is in good condition. All cars imported into the country must be inspected for roadworthiness by the Japan Export Vehicle Inspection Centre (JEVIC) and awarded a certificate. This certificate is one of the mandatory documents for clearing the car at the Mombasa Port.

Making an order
This can be done either via email, web chat or phone. The price quoted can be either Free On Board (FOB) or Cost Insurance and Freight (CIF). The former does not include freight charges and marine insurance. You can negotiate for a discount. Furnish your supplier with your name, contact details and address so that he can process a Proforma Invoice. This reflects the agreed price of the car and is demanded by your bank when wiring the payment. Depending on the company, you can either remit 100% of the value of the car before shipping or 50% down payment. Often, the Japanese supplier will not release the export documents in case you have not paid the whole amount for the car. To save money, it’s advisable to remit the money (in dollars) when the exchange rate to the shilling is low. It takes about two days for the money to reach your supplier’s bank account in Japan.

Shipping
This is the responsibility of your Japanese exporter. And herein lies the beauty of dealing with established companies. Since they have an established supply network, it’s easier for them to book your car promptly for shipment. Small companies run helter-skelter around the congested Japan ports seeking to secure any slot on the car carriers. Normally, two ships leave Japan for Kenya every month. Depending on the shipping company, the ship may either be on a direct Japan-Mombasa route or may first detour to Dubai or Durban. Freight normally takes 22 days.

Tracking and clearance
The exporter will send the vehicle documents by courier service and give you a tracking number. These documents are mandatory, for KRA to clear the vehicle. They include the invoice, three copies of Bill of Lading (which certifies that the car is onboard the particular ship), a JEVIC inspection certificate, original vehicle logbook and deregistration certificate. The BOL also bears the estimated time of arrival of the ship. These documents must be forwarded to your clearing agent.

Mandatory clearance fees
Import Declaration Fee: This is normally Ksh5,000 and is the first payment made in the process of clearing. It normally takes a few days to process.
Delivery Order Fee: The DOF is about Ksh4,500.
Duty plus Registration: The duty is charged as a percentage of the CIF value of the car. In addition, KRA determines the import duty based on year of manufacture of the car. The newer the car, the higher its duty, since it’s calculated on the depreciating rate of its equivalent from a new car showroom. The charges are also determined by the engine capacity of the vehicle. While duty for a 1300CC Mazda Demio is about Ksh155,000, that of a Subaru Forestor 2,000CC is Ksh350,000.  The duty is also quoted inclusive registration, normally Ksh12,000 for a usual passenger car.
Port charges: These depend on the duration the car stays at the container terminals. The longer the stay, the higher the charges. It’s therefore advisable to embark on the clearing process as soon as the car docks at the port. The cost for the average four-day storage is Ksh12,500.
Agency Fee: This is the service fee you pay to your clearing agent. It averages Ksh10,000 a car.