Businesses & Financial News

Kenya’s new auto sales for November jumps 14pc

By Steve

Domestic new car sales grew 14 percent in November, signaling a continued growth acceleration since April this year when recovery signs began to glance, industry data shows.

Figures by the Kenya Motor Industry Association (KMI), a lobbyist for the formal motor sector, show that a total of 12, 750 new vehicles had been sold between January and November, compared to 11,222 total units the industry had managed in 10 months to October – a 14 percent jump.

This means that local dealers sold 247 more new vehicles during the month under review compared to a similar period in 2020 – indicating the faster recovery era buoyed by rising consumer confidence amid easing mobility restrictions following curfew seizure in October.

The KMIA data further shows that a total of 9,681 total units were sold in the same period last year, compared to 12,750 vehicles auto dealers managed in the same period this year.

This implies that an impressive 3,069 more vehicles have been sold in the 11 months of 2021 – representing a 32 percent growth this year.

The November numbers are a culmination of a consistent growth year for players despite the pandemic fears. Car industry enjoyed a record September for new vehicle sales – hitting over 10,000 total units sold since the turn of the year.

Higher spending from buyers and ease of the economic disruption of coronavirus restrictions as well as cheaper financing options by the banks have been attributed to that growth could see the industry sell over 13,000 new vehicles by year end, for the first time since 2018 when the industry sold 13,886 units.

Simba Corporation, one of the market’s consistent dealers, expects the industry to end on high on Government measures taken since July in a sector that was last year hampered by movement restrictions for motorists and sluggish economic growth.

The dealer had last month for instance announced a mouth-watering deal with the National Police Service (NPS) in a deal expected to see NPS receive 50 units of phase 1 of their newly acquired Mahindra Scorpio pick-ups as part of their entire fleet of 100 units.

The Indian automaker Mahindra & Mahindra MAHM.NS in 2012 started assembling two of its small commercial trucks in Kenya. The Scorpio Single and double cabin small trucks were Mahindra’s models at a plant in Mombasa. The plant is owned by its local partner, car retailer Simba Corporation – a Kenyan car dealer.

Equally, Toyota Kenya and Isuzu – the country’s top performers, are also expected to continue the positive growth figures seen this year despite the looming August 2022 polls.

“Commercial market segment has performed impressively over the last few months, better than what we had forecast despite the fears of the pandemic and lockdown restrictions,” said Toyota’s Managing Director, Arvinder Reel in a recent telephone interview on the sector’s performance.

The ongoing construction works and particularly the multibillion Expressway road and the activities in the real estate market are poised to fuel the car industry growth.

KMI figures show that 19,523 new vehicles were sold in Kenya in 2015 – the best the local market has seen since the association began taking track of new vehicle sales in Kenya.

Since 2004 when KMIA started compiling car industry data, it is estimated that 218,295 new vehicles have been sold in the local market.

The Kenyan market is a small bazaar for new vehicles since many consumers are confined to second hand imports from Japan by purchasing power limitations, but it continues to attract global automakers such as Volkswagen due to its growth potential.

There has also been minimal success with the government’s attempt in promoting local assembly of vehicles through tax breaks for firms and curbs on used imports – but the tax agency, the Kenya Revenue Authority (KRA) has muffled those efforts in its quest to improve revenue collection.

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