Businesses & Financial News

Portuguese firm pumps Sh 0.35Billion into the Kenyan Auto Industry

Portuguese multinational Salvador Caetano Group has announced an investment of Sh350million into the Kenyan automotive industry, with the launch of a one-stop auto hub in the local market.

According to the statement by the company, the showroom is expected to be a choice end point for motorists keen on Hyundai and Renault brands.

The company will also Distribution and Retail of New vehicles as well as aftersales services including vehicle care, spare parts and accessory sales.

Salvador Caetano Group is the sole Distributor and Retailer of Hyundai and Renault Passenger vehicles in the Kenyan market.  The Hyundai Dealership, additional to passenger vehicles, also retails the 1.5-ton Hyundai H-100, which is a versatile and dynamic flatbed truck.

“We are pleased to bring a unique service experience to the automotive industry in Kenya.  We provide high-end services to suit your unique automotive expectations, offering a surprise and delightful ownership experience.  Our Automotive hub is a one-stop shop designed for quality, reliability and convenience,” reads the statement in part.

The announcement comes amid worrying concerns in the vehicle demand presently seen in the industry since the pandemic outbreak.

Sales of new motor vehicles fell 26 per cent in the first half ended June, with Isuzu East Africa and Toyota Kenya being the only major automakers that have somewhat weathered the downward sales trend since March.

The pent-up demand in the auto industry had been seen since the country announced a string of restrictions that included partial lockdown (which has since been lifted) and night curfews that limited movement of people meant to minimize the spread of Covid-19 whose impact continue to be felt in the auto market.

Latest data from Kenya Motor Industry Association (KMI) shows that total unit sales of car dealers including Toyota Kenya, Simba Corporation and Isuzu East Africa stood at 4, 570 units in the half year period ended June 2020 – compared to 6,175 units sold in a similar period last year.

Car makers sold 6,456 vehicles in 2018.

The downward trend according to the Managing Director of Toyota Kenya Arvinder Reel will continue into the year 2021 at the earliest with motor vehicle dealers among the businesses registering subdued demand in the economy ravaged by coronavirus pandemic and tighter credit markets.

“The trend will continue for most part of the year and we are likely to see an improvement from the first quarter of 2021 but this will also depend on how quickly the pandemic will be contained,” said Mr. Reel in a telephone interview.

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