Car sales for third quarter cross 10,000 on recovery
Kenya’s motor vehicle industry enjoyed a high in new vehicle sales moving in excess of 10,000 units since the turn of the year, latest industry data shows.
The growth is attributed to higher spending power from buyers following ease of the economic restrictions as well as cheaper financing options by the banks.
This saw the industry sell a total of 10,044 new vehicles for the first time in the nine months to September 2021 as the economic curve bows towards normalcy since Covid-19 pandemic shook the nation.
Data from the Kenya Motor Industry Association (KMI) indicate that total sales stood at 8,811 total units as at the end of August 2021which means 1,230 more new vehicles were sold the next month.
Car dealers expected better performance in the next three months due to impressive growth since April when the industry recovery began to sprout.
Toyota Kenya dealer Arvinder Singh Reel says the Kenyan auto industry will perform even better beyond this year despite the Coronavirus pandemic and the looming general elections pegging the anticipated growth on the rising demand for commercial vehicles.
Impressive performance
“The commercial market segment has performed impressively over the last few months, better than what we had forecast despite the fears of the pandemic and lockdown restrictions,” said Mr Reel in a recent telephone interview with Business Hub.
Also expected to grow the sector is yesterday’s move by the state to lift dawn to dusk curfew that had existed close to two years until October 20, 2021.
According to Dinesh Kotecha, Simba Corporation Ltd Group CEO, the market will do better despite concerns on the looming general elections, a period that is synonymous with slowed business activities resulting from uncertainties.
These sentiments and projections could see the industry selling over 12,000 total units by the close of 2021 despite the prevailing macroeconomic challenges.
Experts say that the ongoing construction works and particularly the multibillion expressway in Nairobi and surge in activities in the real estate market are poised to fuel the car industry growth further.
Despite all this, sales of new luxury cars dropped 14.1 per cent in the nine months ended September on Porsche stockouts as it is yet to get a new dealer in the local market.
The data further reveals that orders for cars that retail in excess of Sh30 million fell to 97 units in the review period from 113 units a year earlier.
BMW was the only high-end car brand to register sales growth to 32 from 20 as orders for Mercedes dropped to 43 from 48 as Land Rover sales declined to 16 from 20. Sales of Bentleys sold only one unit as did Porche.
KMI reveals that in 2015 a whopping 19,523 new vehicles were sold in 2015 in what was the best the local market has ever experienced since the association began taking track of new vehicle sales in Kenya.
Kenyan market
The lobby shows that the last five years offered mixed industry performance with the sector for instance selling just 11,086 new units last year, down from 13,199 in the previous year – a 16 per cent drop with the poor performance blamed on COVID-19 pandemic.
The Kenyan market is a small bazaar for new vehicles since many consumers are confined to second hand imports from Japan by purchasing power limitations, but it continues to attract global automakers such as Volkswagen due to its growth potential.
There have also been minimum success with government’s attempt in promoting local assembly of vehicles through tax breaks for firms and curbs on used imports – but tax agency, the Kenya Revenue Authority (KRA) has muffled those efforts in its quest to improve revenue collection.
