Commerce

Retail auto sales grew 6pc in April

Friday, May 20th, 2022 04:10 | By
Economic growth. Photo/Courtesy

Automobile retail sales in Kenya increased by 6 per cent in April with 1,175 units sold compared to 1,106 in a similar period last year.

According to the latest data by the Kenya Motor Industry Association (KMI), this saw the industry's total vehicle sales hit 4,378 units in January.

This signalled recovery with the sector having sold 436 more units between January and April compared with 3,942 vehicles sold in a similar period last year.

The lobby attributed the rise to improved economic activities since movement restrictions were lifted by the government in July last year. This period witnessed slower auto purchases.

Overall sales

Simba Corporation Group chief executive Dinesh Kotecha who is the manufacturer of Mahindra brands said in a telephone interview that he projects this year’s growth to be slower than 2021.

“I do not expect a busy year because of those challenges and we could go lower than what we did last year as an industry,” said Kotecha – who is also betting big on the implementation of the pending automotive policy.

Overall sales were better than the previous year owing to restrictions that were still in force at the time. Some players who had earlier spoken with Business Hub believe May, June and perhaps July records may record some growth before momentum cools again in August and September due to the August elections.

This is a period that is synonymous with slow economic activities due to uncertainties and random unrest.

With the presidential election slated for Tuesday, August 9, studies show that economic growth is a major factor affecting how people vote.

Strong position

Industry trends also show that March and September are the peak months for sales of new cars, often through part-exchange deals. Car dealers will have lots of used cars to sell, which puts a buyer in a strong position when negotiating.

Data shows that dealers are keen to clear the sale of used cars in July and early August in readiness for new models.

However, volatile exchange rates, looming general elections coupled with overseas logistics challenges are some of the factors that could see players register pent up figures this year.

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