New vehicle sales for May in a shock slump

By Steve Umidha

Sales of new vehicles in May hit a surprise1, 247 units, shockingly lower compared to April’s sales which hit 3,923 units and 1,035 vehicles the industry sold in March this year.

Data from the Kenya Motor Vehicle Industry Association (KMI) shows that formal dealers, including Isuzu East Africa, Toyota Kenya and Simba Corporation, sold 1,247 units in the month of May alone, compared to 1,109 units sold by car makers in a similar period last year.

Car and truck buyers were out in force in April, and as a result the auto industry turned in strong sales results just as it heads into the crucial summer selling season.

As Kenyans deepen their love for sport utility vehicles (SUVs), pickup trucks and minivans, automakers felt the effect when it came to April sales.

April’s impressive results came despite lower-than-expected sales by most car dealers who at the beginning of the year were uncertain about future, coupled with the uncertainty over automotive policy – whose cause, the government says is meant to shield local vehicle manufacturers from what new vehicle dealers believe is unfair market competition brought by importers of second-hand vehicles.

Ban on importation of second-hand vehicles and particularly those with 1500cc engine capacity and older than three years, will now take a little longer, after the Kenyan government last week bowed to sustained pressure from car dealers and importers.

The implementation of the draft copy of Motor Vehicle Policy (MVP) was meant to begin June 30. The motor vehicle policy was being prepared by Kenya vehicle manufacturers and auto vehicle players and companies, but continue to face hostility from car importers who insist they were not consulted when such plans were being mooted.

It seeks to lower the age limit of car imports coming into the country from 8 to 5 years while at the same time guaranteeing tariff-free to some vehicle parts being produced in the country.

The move would have made it difficult for buyers of such vehicles, popular on Kenyan roads pay more for such purchases owing to high duty fees and associated costs of buying cars manufactured in recent years.

The government, further targets to reduce the level of motor parts importation in order to make it possible for local companies to buy from local manufacturers of vehicle parts as well as invent reduced tariffs for local car assemblers, lower high costs of additional taxes, charges, levies as well as logistical charges to grow the industry and make it competitive.