KMI: Sales dip by 26pc in first half
Steve Umidha @SteveUmidha
There was a 26 per cent dip in new motor vehicles sales in the first half ended June, with Isuzu East Africa and Toyota Kenya somehow weathering the downward trend since March.
The pent-up demand in the auto industry has been felt since the country announced a string of restrictions and night curfews that limited movement of people meant to minimise the spread of Covid-19, affecting the auto market.
Latest data from Kenya Motor Industry Association (KMI) shows total unit sales of car dealers including Toyota Kenya, Simba Corporation and Isuzu East Africa stood at 4,570 units in the half year period ended June 2020 – compared to 6,175 units sold in a similar period last year. Car makers sold 6,456 vehicles in 2018.
Downward trend
Toyota Kenya Arvinder Reel managing director said the downward trend will continue into 2021 as motor vehicle dealers register subdued demand on the back of Covid-19 shocks and tighter credit markets.
“The trend will continue for most part of the year and we are likely to see an improvement from the first quarter of 2021 but this will also depend on how quickly the pandemic will be contained,” said Reel in a telephone interview.
As a result, Toyota Kenya boss says car dealers have had to contend with reduced volumes in terms of vehicle lease contracts from the government as well as counties, while slow corporate business also had a significant bearing on the business.
“The biggest impact on sales has been over the four-month period between March and June 2020, experiencing a 39 per cent decline in sales compared to the corresponding in 2019,” he said.
Government reluctance
Reluctance by the government ministries and agencies to spend on new vehicles denied dealers the much needed revenue stream from the State with walk-in purchases having reduced significantly.
KMI Chairperson Rita Kavashe who is also the managing director of Isuzu East Africa estimates that the market would contract by about 30 per cent by end of the year.
However, while some Kenyans were struggling to the new normal, a few were taking high end vehicles out of showrooms depicting that a section of the public have disposable income in this unprecedented period.
KMI said in another report dealers sold 45 high-end cars between January and March compared to 26 units a year earlier.
