Driving a car has now become a fashionable aspect of social class in Rwanda especially after the country has rapidly grown 18 years after the genocide. The number of motor vehicle users has rapidly increased and so is the traffic jam in the city of Kigali.
In order to meet the demand of motorists in Rwanda, car importation business has become lucrative in Rwanda. Many car importing companies have opened up around Kigali city center.
Car dealer and a representative of Chatha Motors in Rwanda, Muhammad Imran, says there are many ways in which one can acquire a car in Rwanda.
However, most people prefer to work with car importers; a few others use the internet to purchase one online, while others prefer buying second hand used cars from within the region.
Imran explains that it is very easy to import a car to Rwanda, when one deals with an importer rather than importing the car through an online purchase, since Internet is not trusted when it comes to importing cars.
He says that this is because it is very tasking and one cannot guarantee the quality, Vehicle History Report (VHR), and the mechanical condition of the car one wants.
Most of the authorized dealer companies are owned by foreigners and they deal with vehicles from Japan, India, USA, Canada and Dubai- these are mostly brand new or used reconditioned cars.
Some of the car dealers and importers in Rwanda include Akagera motors, Rwanda Motors, SAR motors, Car trading & General Services Ltd among others.
In 2005 the Rwandan government issued an ultimatum to right-hand drive vehicle owners to get rid of their cars within the period of four years as they will become illegal. It also banned the importation of such cars into the country.
Only vehicles traveling on the right side of the road and therefore left-hand drive cars should be driven, the ultimatum stated. As a result, 85% of the total number of people with right-hand cars got affected.
Despite the ultimatum which ended in 2009, right-hand vehicles are still in the country and most of them are being seen in good mechanical condition.
Currently Rwanda uses a right-hand drive system on its roads and most vehicles are right-hand.
There was proposal, in 2009, to change the driving system to left-hand drive however this has since been reversed and the new guidelines on vehicle importation in Rwanda, stipulates that every new or refurbished vehicle that enters Rwanda, must be a left hand drive.
Right hand drive cars can only be allowed in the country for a period of two weeks- (this used to be a period of one month).
“Most of the cars we import are original left hand, according to what people prefer” Imran says “Most people in Rwanda prefer Japanese car such as; Benz, BMW, Volkswagen, Suzuki, RAV4, Jeeps, and Corollas – because of the mountainous nature of the country”
As company, Imran says that to import a car is not a difficult procedure. The company has business connections which are spread through the region of East Africa and abroad (USA, Japan, South Africa and Kenya).
Imran uses these people (friends and Family) from the places he imports cars, since he has entrusted these people in other countries, to make sure first- to check the condition of the car if it’s in good condition before it is sent to the Rwandan market.
Once this is confirmed, the cars are parked and shipped from the importing country to the Indian Ocean through the shipping company.
The cars are then cleared at the seaport (customs) which is at the Mombasa seaport, in Kenya.
Imran then hires drivers to drive the cleared cars from the seaport to Rwanda. “This takes about four days for a vehicle to reach its final destination in Kigali, since it has to be driven through two countries (Uganda and Kenya)” he says “each of the drivers is paid about 400USdollars for the whole trip”.
Imran’s vehicle display yard has over 40 cars of different makes and models. It is at this point that the buyers can access and choose the car of their choice. “Under normal circumstance the company imports about 48 cars but that depends on the monthly sales.
If the sales are good, I can import more vehicles, and this sometime depends on the number of orders made by clients” Imran says.
At this point, the buyer is handed his or her ordered vehicle, checks the status of the car, make a test drive if possible, the client can also bring a mechanic to make sure the car is in right condition as requested.
The client can now go for other requirements of registering the vehicle with the Rwanda Revenue Authority (RRA) and acquire insurance with a local lnsurance company; in order to be licensed to use the vehicle on all roads in Rwanda.
Registration is done prior to the use of the vehicle since a non-registered vehicle cannot be allowed to circulate.
Immediately after payment of the registration fees, number plates are given to the owner of the motor vehicle.
However, each vehicle owner is required to pay four (4) types of taxes: (custom duty-25%, value added Tax-18%, consumption tax – (% depends) and Withholding Tax-5%) in order to get the vehicle licensed and registered.
After paying these four taxes, the next step is to pay for registration fee, then acquire plate number, and Yellow Card (carte jeune) which is given at the same time with the number plate . This registration fee is paid according to the model or type of vehicle.
Imported vehicles’ registration is done from the customs’ premises situated in Gikondo. The vehicles within the country can be registered at any RRA office in the Provinces, whereas, in Kigali City, registration takes place from Revenue Protection Department office in Gikondo.
This type of Vehicle Registration Tax (VRT) is a tax charged on motor vehicles and other non motor vehicle engines, this registration include Plate fees or plate rental, property tax and road license.
The VRT is calculated according to the engine power of the vehicle (“Cheveaux Vapeur”, CV or “Horse Power”, HP) for light and heavy motor vehicles, are charged according to their weights
For insuring the vehicle, there are two types- Aluminum insurance and Third-Party Insurance. These are provided by local insurance companies such as CORAR, COGEAR, SORAS, Phoenix Insurance, Sonarwa among others.
Aluminum Insurance- one pays 372,441 Rwandan francs per annum, while third-Party- one pays 55,316 Rwandan francs according to charges published by CORAR insurance company.
In order to get an insurance process, the vehicle owner has to only produce a Yellow card, and sign a contract with the insurance company – this is renewable and flexible depending on the wishes of the vehicle owner.
Payment of insurance premium can also be paid in installments and it is done annually.
If the client does not want to or does not have time to go through the whole of registration the car dealers or importer can do it with an extra charge, separate from the initial value of the car.
For Chatha Motors, like many other car dealers, car business in the Rwandan market is small compared to the rest of the East African countries, but still a very good market, because the profit margin is good and stands more opportunity of good business especially with the growing economy and demand for transport.