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By Steve UMIDHA
The Kenyan auto industry just posted another slump in local sales, latest industry figures show.
The industry sold a total of 10,595 units between January and November this year, 1,367 units less than the industry managed in a similar period last year when vehicle makers sold 11, 962 units – representing a 13 percent dip.
The sector sold a total of 9,684 units in 10 months to October 2023, 1,361 units less than it managed in a similar period last year when the industry sold a total of 11,045 units.
The Kenya Motor Industry Association (KMIA) attributed the low retail sales numbers to a difficult year borne from the brunt of an uncertain economic environment, sending ripples through the auto sector, which has largely dodged a significant hit from inflation this year in comparison to other sectors, high taxes and pending bills.
In addition, new-vehicle sales incentives climbed further in November 2023 after retreating slightly in October.
Macroeconomic indicators like the gross domestic product (GDP) – a monetary measure of the market value of all the final goods and services produced and sold in a specific time period, are statistics or data readings that reflect the economic circumstances of a country or sector.
They are used by analysts and governments to assess the current and future health of the economy and financial markets. Other factors like interest rates, unemployment rates, disposable income, and exchange rates ordinarily affect the growth and performance of the automotive industry.
And so, during a slump, auto sales typically fall, often significantly and many buyers tend to back out of the market until the economy recovers – a kin to the trend seen today.
According to the managing director of Cfao Motors – formerly Toyota Kenya Arvinder Reel, the industry will close the year with not more than 11K total sales across all car brands in the local market, predicting a flat rate growth owing to the abovementioned factors.