April Auto Sales Impressive Despite uncertainty over automotive policy

Car and truck buyers were out in force in April, and as a result the auto industry turned in strong sales results just as it heads into the crucial summer selling season. 3,923 units were sold in the month under review against 1,035 vehicles the industry sold in March.

As Kenyans deepen their love for sport utility vehicles (SUVs), pickup trucks and minivans, automakers felt the effect when it came to April sales, according to the latest industry figures by Kenya Motor Industry Association (KMIA).

During a similar period last year, the industry sold 4,123 units compared to 3,130 units in March of the same year, owing to rising consumer confidence at the time despite early days after post-election nausea.

The double digit growth is as a result of increased vehicle lease orders by the government as well as improved micro-economic conditions.

The impressive results came despite lower-than-expected sales by most car dealers who at the beginning of the year were uncertain about future, coupled with the uncertainty over automotive policy – whose cause, the government says is meant to shield local vehicle manufacturers from what new vehicle dealers believe is unfair market competition brought by importers of second-hand vehicles.

Ban on importation of second-hand vehicles and particularly those with 1500cc engine capacity and older than three years, will now take a little longer, after the Kenyan government last week bowed to sustained pressure from car dealers and importers.

This after Kenyan MPs suspended the implementation of a ban on importation of eight-year-old used cars in hat is seen as a major win for car dealers and despite the State saying it will not hold back on such plans.

The implementation of the draft copy of Motor Vehicle Policy (MVP) was meant to begin June 30. The motor vehicle policy was being prepared by Kenya vehicle manufacturers and auto vehicle players and companies, but continue to face hostility from car importers who insist they were not consulted when such plans were being mooted.

It seeks to lower the age limit of car imports coming into the country from 8 to 5 years while at the same time guaranteeing tariff-free to some vehicle parts being produced in the country.

The move would have made it difficult for buyers of such vehicles, popular on Kenyan roads pay more for such purchases owing to high duty fees and associated costs of buying cars manufactured in recent years.

The government, further targets to reduce the level of motor parts importation in order to make it possible for local companies to buy from local manufacturers of vehicle parts as well as invent reduced tariffs for local car assemblers, lower high costs of additional taxes, charges, levies as well as logistical charges to grow the industry and make it competitive.

With the encouraging April sales rate, analysts predict a sustainable market for the full year. They expect overall industry sales to grow further this year.