Businesses & Financial News

June new car sales dip amid industry correction

Sales of new motor vehicles dipped marginally in June to register 1,121 total units, even though the industry continued to display impressive signs of rebound helped by the ongoing infrastructure projects across the country.

Last month the industry sold 1,138 total units in what has been a diligent ‘work in progress’ by car makers to adjust to consumers’ newly formed purchase patterns and priorities as a result of the pandemic.

The latest figures by Kenya Motor Industry Association (KIMA) show that the industry total vehicle sales now stand at 6,158 in the first six months of 2021 –more than half of 10, 972 total units sold by the industry in 2020.

Market leader Isuzu has since sold a total of 2, 346 units, followed by Toyota at 1, 352 units while Mitsubishi brands under Simba Corporation has so far sold 825 units since the start of 2021. Tata brand follows closely with 571 total units sold.

Kenya’s Auto industry is expected to perform better this year despite the Coronavirus pandemic owing to the demand for commercial vehicles, with the sector poised to hit over 12,000 total units by the close of 2021.

The continued growth according to Dinesh Kotecha, the Group Chief executive of Simba Corporation Limited is being driven by the demand for commercial vehicles particularly the trucks which account for about 56 per cent of the industry’s total sales.

“I think this momentum will carry on based on the fact that we have so many ongoing infrastructure projects even though there still exists uncertainty with the pandemic and upcoming general elections,” said Mr Kotecha in a previous interview, predicting a busy year for car dealers.

That growth is also attributed to the near full opening of the economy which was not possible in the same period last year due to strict coronavirus restrictions.

With a huge number of Kenyan workforce working from home for most part of last year– especially those drawn from the private sector, with a good number facing financial uncertainty and driving far less for leisure activities, automakers faced declined sales.

Now, however, the auto industry is preparing for a strong recovery, with many analysts predicting a positive year as lockdown restrictions ease and consumers set their sights on new car purchases.

The private sector has largely contributed to the industry’s growth with output and new orders rising solidly and fastest in seven straight months to May amid loosened travel restrictions. That expansion was seen following the relaxation of measures on curfews and travel between counties. Firms also reported an increase in client orders.

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