New car sales dip 13pc as taxes hit consumers
New vehicle sales tumbled 13 per cent in eight months to August, latest sector data shows as the industry’s difficulties under the weight of tax-burdened consumers and a wobbly economy continue into the second half of the year.
Auto firms led by Isuzu East Africa, CFAO Group, formerly Toyota Kenya, Nissan, Simba Corporation (Simba Motors) and Inchape Kenya Limited among other players reported combined sales totaling 7,621 units in the review period compared to 8,752 units sold from earlier figures, meaning vehicle manufacturers sold 1,131 units fewer during that period.
The latest data by the Kenya Motor Industry Association (KMIA) further shows that on a month – to – month basis, the demand for showroom vehicles has been falling with local players selling an improved 985 units in August alone, while monthly sales for July stood at just 144 units including those assembled locally.
In contrast, the industry sold 8,811 units in eight months to August in 2021, signaling a free – falling trend since the onslaught of Coronavirus nightmare. But despite the reduced demand since 2020, certain vehicle brands have remained relatively common on Kenyan roads.
As of full year 2021, the Isuzu D-Max remained one of the best-selling vehicle brands in the country, while Toyota brands or CFAO still is the uncontested leader with 47 per cent share above Isuzu at 26.6 per cent, which means these two brands hold almost three-quarters of Kenyan sales for the year. During that year, Ford, Nissan and Volkswagen brands round out the top 5.
Model-wise, the Isuzu D-Max is the most popular above its archenemy the Toyota Hilux with 17.5 per cent and 14.7 per cent share respectively.
The Toyota Land Cruiser 70 finds its way to the podium at 8.8 percent of the market, distancing the Isuzu N-Series, Toyota Land Cruiser 79 and Ford Ranger.
Market share
Looking at cumulative data from H1 2023 brand-wise, this year’s leader is still Isuzu with 46.1 per cent market share but has seen its sales number fall by 5.5 percent in the first six months of the year, followed by Toyota with 31.8 per cent market share and a 1.0 perc ent growth in volume.
Chery becomes the third best-selling brand in Kenya. Currency fluctuations and unsteady interest rates, as well as the high cost of fuel remain a big threat to the sector’s survival this year. Petroleum products shot up last Friday after the Energy and Petroleum Regulatory Authority (EPRA) pushed upwards the prices of the commodity in its September – October 2023 review – crossing the Sh200 mark for the first time in the country’s history.
The latest review has seen the price of super petrol go up by Sh16.96 a litre to retail at Sh211.64 in Nairobi and its environs, diesel will now retail at Sh200.9 per litre, while kerosene will sell at Sh202.6 per litre.
Prices of diesel and kerosene have risen by Sh21.32 per litre and Sh33.13 per litre respectively.
Higher fuel prices have a knock-on effect on Kenyan consumers and could potentially deter their interest in new car purchases.
An increase in the fuel price impacts the cost of consumer products to an increase in logistic costs – which is typically passed onto the consumer, with a basket of goods costing the consumer more money as a result.
