The mandatory registration of imported used motor vehicle before leaving Container Freight Stations (CFSs) coupled with a weak shilling hurting sales according to importers and dealers.
It is now compulsory for imported second-hand vehicles to be fitted with number plates before leaving CFSs where they are held after being discharged at the port.
The move has seen units remain at CFSs for long leading to reduced interest in the cars as buyers go for the latest registration.
This the dealers says is very applicable if the units were to be registered while at showrooms.
“Buyers go for newer numbers and if you register your units before moving it out of the CFS, nobody wants to buy it as most people wait for newer plates,” Car Importers Association of Kenya (CIAK) national chairman Peter Otieno told the Star.
This, he says, has discouraged dealers from bringing in more units until those in CFSs and yards are sold. Those that fail to move are auctioned.
The mandatory affixing of plates does not apply to new vehicles imported by franchise holders, who offload and bond the units in customs warehouses awaiting sale.
Used-cars continue to be preferred by majority of Kenyans, and account for about 80 per cent of vehicles on the roads
Monthly imports for used cars has stagnated this month, importers say.
This is despite the year coming to an end a period that has traditionally been marked with high numbers, as importers rush to beat KENYA'S eight-year rule for used cars.
Buyers and dealers must have any 2015 registered or manufactured vehicles in the country by December 31.
On average, Kenya imports between 7,000 and 8,000 units per month but this goes up to 12,000 units in the last months of the year, when the unit prices also begin to drop in the import source markets.
Japan, United Kingdom, United Arab Emirates, Singapore and South Africa are Kenya's key source markets for used cars.
Kenya Ports Authority vessel arrival plan shows there are four vessels expected between October 27 and November 3, bringing in 2,704 units.
“The numbers remain low,” Otieno said.
To address the number plate challenge, dealers have asked the government to come up with a random car registration system, which will tame the trend of rushing for newer plates.
Alternatively, they want the National Transport Safety Authority (NTSA) to come up with provisional number plates that can be replaced with current ones upon the sale of a unit .
The authority has started rolling out the much-awaited smart number plates.
The move to have cars fitted with plates, before moving out of port facilities, was part of the government’s attempt to tame tax evasion and dumping of older cars in the market.
This is based on the different age limits for used-cars with Kenya at eight years, Uganda (15 years) while Tanzania has it’s at 10 years, but older units have been entering at an extra tax charge.
Rwanda, Burundi and South Sudan have had no limits but there has been recent efforts to put a cap.
Recent price increases occasioned by increased demand for the units in the wake of a reduced global production of new vehicles, and the weak shilling to the dollar has not dampened Kenya's demand for used cars
Market trends show markets such as the US is currently embracing used cars mainly from the local market, Europe and Japan, a move that has impacted global prices for the units.
Global motor vehicle production has been hit by a shortage of chips, also known as semiconductors since last year.
The shortage was worsened by the Russia-Ukraine war, industry players say.
The two are key exporters of raw materials used in the manufacturing of various microchips.
This includes palladium heavily used in making memory and sensor chips, where Russia accounts for 45 per cent of the global supply.
It forced automakers to cut production since they cannot access enough chips to power latest technology models, where most electronic components require the material to function.
Kenyans have been opting for third generation cars, which are locally resold.
“Demand is very high because prices of second generation vehicles have shot up,” Kenya Auto Bazaar Association chairman John Kipchumba said.
The price of an imported used Mazda Demio, 1,500 cc, for instance has increased by about up to 50 per cent, from between Sh500,000 and Sh600,000 to between Sh700,000 and Sh900,000.
A Toyota Premio is averaging between Sh1.6 million and Sh2.5 million depending on the engine capacity, from a low of Sh1.2 million.
Toyota Axio is selling at about Sh1.4 million on average, up from an average of Sh1 million, with other makes also recording almost a similar increase on prices.