President Uhuru Kenyatta has cautioned private sector players against sabotaging the government's policy to give priority to locally produced goods in State procurement.
The President said anyone seeking to scuttle government policies aimed at creating jobs for Kenyans will not succeed.
Mr Kenyatta spoke in Mombasa County on Friday when he presided over the launch of Toyota Kenya's new assembly plant at the Associated Vehicle Assemblers in Miritini.
He said investors interested in winning government supply tenders, especially in the automotive sector, should get into the business of local assembly or manufacturing.
"The public sector has clear instructions to prioritise locally assembled vehicles in their procurement decisions. However, I have noted with concern that some of the players in the automotive sector are actively campaigning against this initiative by the government to support investment in local assembly of vehicles," he said.
The Head of State said private sector actors should always put the interests of the country first and align their business models with Kenya's development aspirations.
"As we implement the Buy Kenya agenda, we expect the private sector to reciprocate by investing in full automotive manufacturing; from joint ventures, training and building the capacity of local Small and Medium-sized Enterprises (SMEs) to providing local content inputs," he said.
The President challenged Toyota to scale up its investments in Kenya from assembling vehicles and the eventual establishment of a fully integrated vehicle manufacturing plant.
Mr Kenyatta further said the government was working on a national automotive policy as part of measures to support local vehicle manufacturer,.
He instructed Trade, Industry and Cooperatives Cabinet Secretary Peter Munya to present the policy to the Cabinet for approval within three weeks.
"The overall objective of the policy is to provide our domestic industry with opportunities to achieve competitiveness in manufacturing of vehicles and parts," the President said.
The policy will, among other provisions, lay down the legal and institutional framework necessary to guarantee regulatory certainty for investors.
It will also define the desired knockdown kit levels for vehicle and motorcycle assembly as well as articulate the fiscal incentives and other measures needed to stimulate local content development.
The policy will also outline the role of Technical and Vocational Education and Training (TVET) in the development of the automotive industry.
President Kenyatta said Kenya was positioning itself to take advantage of the huge market created by the adoption of the African Continental Free Trade Area (AfCFTA) which holds an enormous market potential of 1.27 billion people.
Toyota has invested Shs1 billion in the new assembly line designed to assemble the new Hilux 4x4 pick-up trucks.
Kenya's motor vehicle assembly industry registered an annual turnover of $600 million (including regional dealerships) in 2018. It employs more than 12,000 people.
Volkswagen and Peugeot opened new production lines in Kenya in the last two years while General Motors substantially increased its investment in the local assembly of heavy commercial vehicles.