CONTACTS: +254 726879488 (Mobile)
+254770 455 116 (Office)
By staff
Auto sales slid slightly to begin 2017, as car-makers Wednesday reported a 28.72 per cent decline in new cars and trucks sold in January compared to a year ago.
Latest data by Kenya Motor Industry Association (KMI), shows the dip is the lowest in eight years by the industry.
Demand for utility vehicles such as SUVs, trucks and pickups continued to help many automakers offset heavy losses in medium and large passenger buses, which experienced 17.6 per cent and 61.9 per cent decline respectively, of the 757 total vehicles sold last month, compared to 1,062 units sold over a similar period last year.
The industry jolt was first felt in September, 2016 – where sales weakened by 48.6 per cent, 30.93 per cent in October and 30.24 per cent dip in November, marking the first time since 2012 that sales of new cars and trucks declined for three consecutive months.
KMI data shows that the car industry closed 2016 on a low with just 13,535 total units sold compared to 19,523 units in 2015, representing a 30.6 per cent decline.
Industry players are now blaming the trend on four factors, namely; interest capping by banks, depreciation in the value of Kenyan shilling, low market liquidity and general slowing economy.
“The market is going through very tough times. Businesses are generally not good and interest capping has not helped, banks are not lending at higher rates, the capping has not been helpful,” said Dinesh Kotecha, a director at Simba Corporation (Simba Corp).
The market is further expected to contract in the coming months on looming general elections, according to Dinesh, who says the polls will adversely affect consumer demand hoping to buy new vehicles.