Abstract:
firms. Secondly, the sector was chosen because of
the complexity of the motor vehicle industry with one motor vehicle comprising about
10,000 component parts, all of which would be difficult for one company to manufacture
in-house.
The research was mainly qualitative, but a quantitative approach was also
adopted. Thematic content analysis approach was used to analyze the qualitative data and
descriptive statistics to analyze the quantitative data. The study interviewed managers of
two of the three motor vehicle assemblers and nine franchise holders. Sixty six managers
of component parts suppliers filled and returned questionnaires. Observation and perusal
of records was also done.
xv
The results indicate that the level of subcontracting that takes place between
small, medium and large firms in the motor vehicle manufacturing industry in Kenya is
minimal. The little subcontracting that exists is motivated mainly by a desire to remain in
the good books of the government. The main benefit derived from subcontracting by the
large enterprises is lead time, which is shorter. For the SMEs it is that the big firms
provide them with a steady market for their goods. The big enterprises are not willing to
buy component parts from local suppliers and especially not local SME suppliers mainly
due to the inability of the SMEs to supply quality products to schedule, lack of local
suppliers for certain parts and competition from imported second hand vehicles from
Japan, Singapore and lately from Europe. The proliferation of makes and models also
requires frequent technological changes which both assemblers and SMEs owners find
difficult to keep up with
The study recommends that the government should reduce the age of imported
second hand vehicles to not more than five years and find a way of compelling the
franchise holders and assemblers to buy parts locally. SMEs should also find a way to
acquire up to date technology and become more competitive. The government must come
up with a sound well articulated industrial policy for the development of the motor
vehicle industry.
