Inside Politics

Auto sales lose speed in November as virus spikes, bites economy

Wednesday, December 23rd, 2020 00:00 |
Motor vehicle showroom. Photo/Courtesy

INDUSTRY: The pace of auto sales slowed in November, Kenya Motor Industry Association data shows, amid a huge spike of recorded Covid infections in the country. 

Monthly adjusted sales for total vehicles sold during the month dropped to 1,044 units from 1,100 units the industry sold in October, bringing the total of vehicles sold across all car makers to 9,792 units since January – which is 2,063 units less, the industry sold in a similar period last year.

Prior to this drop, the auto industry sales had quickened exponentially from July, expanding for the fourth straight month to October before coming to a sudden halt, in what experts say was an expected dip due to the second wave of pandemic that also hit numerous manufacturers.

“You could predict this right from the month of October when the number of infections began to escalate and it was clear industries would take a hit as a result, auto industry as well,” said Trevor Lumenya, an automobile expert.

Swings back

This trend, he added, could continue for the next two to three months before the industry swings back to near normalcy.

Kenya’s economy has been hit hard by Covid-19, severely affecting industrial output, incomes and jobs.

The economy has been exposed through the dampening effects on domestic activity of the containment measures and behavioral responses.

Despite data showing a dip in auto sales for the month of November, Kenya’s auto industry is continuing its improvement from lows in April that were caused by the Covid-19 pandemic when first infection cases were reported.

Most dealers announced improved sales, in a month that has seen Isuzu East Africa sell 3, 885 vehicles to date, helped by truck business compared to Toyota’s 2,278 units including its HINO division and Mitsubishi’s 1,334 total units sold year-to-date.

Reduced sales

December is synonymous with end-year festivities but statistics show that car makers could experience reduced sales owing to the ongoing health crisis with the majority of the country’s middle class operating on thin budgets.

Financial incomes among the majority of Kenyans fell by double digits between March and June with a good number affected by cuts in wages than in the other nations, according to a survey by GeoPoll.

The study found that Kenya had the most widespread income cuts of any of the six African nations polled in November.

Around 52 per cent of the respondents across all six nations reported a large drop in earnings since June, but 64 per cent of respondents in Kenya suffered the same.

Even then, the car market is expected to pick up in early next year.

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