Kenya’s February new car sales signal hope for auto dealers

By Remie Otieno

New vehicle registrations rose by 14 percent in February to record total industry sales of 1,984 units compared to 1,738 cars sold in a similar period last year.

The latest data by the Kenya Motor Industry Association (KMI), a lobbyist for the formal motor sector, shows an impressive and best performance in a single month for car makers who sold 1,680 new cars in a similar month in 2019 and 1,969 total units a year earlier.

That growth, is however not expected to sustain in the coming months, according to industry predictions.

The managing director of CFAO Motors Limited Kenya, formerly Toyota Kenya Arvinder Singh Reel lists volatile exchange rates, looming general elections as well as oversea logistics challenges as some of the factors that could see players register pent up figures this year.

“We could see possibly similar numbers as last year as we expect a lot of challenges this year which may also be affected by global prices in crude oil and the pending automobile policy still at the ministry of transport,” expressed Mr Reel in a previous interview.

Further, with the number of infrastructure projects coming to their tail end owing to the looming general elections, Dinesh Kotecha – the Group chief executive of Simba Corporation, the manufacturer of Mahindra brands, believes that car dealers will likely see a reduction in government contracts as the new administration takes office after the August national polls.

Auto dealers’ businesses were adversely impacted by the Coronavirus hangovers but are now angling for new opportunities with CFAO Motors for instance, venturing into the car trade-in business model as a new strategy to grow sales of its new vehicles in a deal announced on Tuesday.

The automobile firm which rebranded to CFAO Motors will however, remain the exclusive distributor of brand new Toyota vehicles and genuine parts in the Kenyan market.

Domestic car dealers ended 2021 on an electric high, selling an impressive 14, 250 new car sales in 12 months to December despite a tumultuous year occasioned by Covid-19.

Higher spending from buyers and ease of the economic disruption of coronavirus restrictions as well as cheaper financing options by the banks were all mentioned as reasons for last year’s growth.

Industry trends also show that March and September are the peak months for sales of new cars, often through part-exchange deals.

So technically, car dealers will have lots of used cars to sell, which puts you in a strong position when negotiating. Dealers are also often keen to clear out used cars in July and early August in readiness for new models.