Inside Politics

Boom for auto firms as new car sales rise 18pc

Tuesday, November 23rd, 2021 07:15 |
Cars aligned for sale. PHOTO/COURTESY

The sale of new cars domestically grew 18 per cent from 10 months to October, reversing depressed sales witnessed in a similar period last year.

Data from Kenya Motor Industry Association (KMI), a formal motor sector lobby, shows that 1,281 total units were sold in October 2021, compared to 1,087 vehicles car makers managed in the same period last year.

The local dealers sold194 more new vehicles during the month under review, compared to a similar period in 2020, signalling a faster recovery era buoyed by rising consumer confidence amid easing mobility restrictions as the pandemic curfew ended.

October numbers are a culmination of a consistent growth year for players despite the pandemic fears. Car industry enjoyed a record September for new vehicle sales – hitting over 10,000 total units sold since the turn of the year.

Economic disruption

Higher spending from buyers and ease of the economic disruption of coronavirus restrictions as well as cheaper financing options by the banks could see the industry sell over 13,000 new vehicles by year end, for first time since 2018 when the industry sold 13,886 units.

According to motor enthusiast and car expert Trevor Lumenya, assuming car dealers sell over 2,500 new vehicles between now and December, the sector may attain one of the highest sales in the recent past.

“It has been a predictable year since April when the sector began to show early signs of a turnaround. So assuming those estimates are met, then I do not see why the sector cannot meet that target, despite the prevailing market conditions,” he said yesterday.

Further, Lumenya expects car dealers to witness an even better performance beyond December helped by the impressive growth since in larger parts of 2021 – a period that was largely hampered by movement restrictions for motorists and sluggish economic growth.

Pandemic sales decreased significantly in 2020 with 6,942 sales which was a 47.8 per cent dip compared to 2019.

However, 2021 started on a positive note for the Kenyan market with 1,530 units sold in the first quarter, reporting a 69.8 per cent increase compared to first quarter of 2020.

Sales soared in the second quarter due to the incredibly low levels of the previous year, reporting a 41.6 per cent increase with 1,410 units sold. Cumulatively, the numbers have since soared to 11,222 total units sold by October 2021.

Kenya’s top performing dealers such as Toyota Kenya and Isuzu are expected to hit theirv targets, if continued impressive commercial vehicle sales are to be sustained, this despite the looming general elections.

“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 Toyota MD, Arvinder Reel in a recent telephone interview on the sector performance.

The ongoing construction works and particularly the multibillion Expressway road and the activities in the real estate market are poised to fuel the car industry growth.

KMI figures shows that 19,523 new vehicles were sold in Kenya in 2015 – the best the local market has seen since the association began taking track of new vehicle sales in Kenya.

Purchasing power

Since 2004 when KMIA started compiling car industry data, it is estimated that 218,295 new vehicles have been sold in the local market.

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.

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