New motor vehicle sales dip by 1.4pc

Tuesday, April 21st, 2020 00:00 |
Motor vehicle showroom. Photo/Courtesy

Steve Umidha

New motor vehicle sales stagnated at 2,661 units, registering a marginal 1.4 per cent drop in the first three months of 2020 compared to a similar period last year when 2,700 units were sold.

The latest industry data by the Kenya Motor Industry (KMI) shows that Isuzu EA sold majority of the units since the year started at 1,048 motor vehicles, Toyota delivered 637 while Mitsubishi managed to sell 316 units.

A sharp decline in vehicle sales is expected in the coming months due to the Covid-19 plague that continues to not only claim lives, but has also unsettled businesses, slain industries with key sectors such as automobiles adversely affected.

Owing to the uncertainty brought by the coronavirus pandemic, Kenyans are expected to spend less on new vehicle purchases.

Slow growth

“The uncertainty will unquestionably push down the demand for new vehicle orders and we can only predict slow growth this year,” said Simba Corp managing director Dinesh Kotecha.

Several government ministries and agencies, that had previously placed tenders for vehicle leases as well as local purchases in line with the President Uhuru Kenyatta’s ‘Build Kenya, Buy Kenya’ directive, are expected to temporary halt such plans with most of the monies now channelled towards fighting Covid-19.

This in return is projected to deny car dealers the much needed revenue stream from the State.

Through the ‘Build Kenya, Buy Kenya’ initiative, the government seeks to reduce the level of vehicle parts importation to make it possible for local companies to buy from local manufacturers as well as reduce tariffs for the country’s car assemblers, lower high costs of additional taxes, charges, and logistical charges to grow the industry and make it competitive.

The implementation of Motor Vehicle Policy (MVP), being prepared by Kenya vehicle manufacturers and auto vehicle companies, is expected to be ready and will pave way for the ban on importation of second-hand vehicles, in particular, those with 1,500cc engine capacity and are older than three years.

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