New vehicles sales in
Kenya recorded a slowdown in 2024
as dealers navigated a tough business
environment occasioned by high
taxes and reduced uptake of units by
the government.
Industry data by the Kenya Motor Industry Association (KMIA) shows the 11 major dealers in Kenya sold a total of 11,352 units including exports to regional markets, with those sold in the local market closing the year at 11,059.
The overall industry sales are a slowdown from 11,370 units sold in 2023 and the 13, 352 new vehicles (zero milage) sold in 2022, with second-hand imports remaining the most preferred mainly on their affordability compared to new ones.
This, even as individuals and businesses reported reduced spending power during the year that also saw the cost of credit hit new highs on higher interest rates.
During the first half of the year, Central Bank of Kenya (CBK) benchmark lending rate went up to 13 per cent, with Commercial banks average lending rates soaring to 16.85 per cent in June 2024 from 14.64 per cent in December the previous year.
A sizable percentage of new vehicle sales, mainly for companies and individuals, are financed under asset plans by the different banks. Isuzu East Africa managing director Rita Kavashe also attributed the slowdown in sales to reduced procurement by government who is a key buyer.
“Interest rates went up 20 per cent making it difficult for some customer to buy new product, ” she told the Star.
There is also the aspect of pending bills, she noted, where most customers in the construction sector and other areas have not been paid for works done.
“This cash flow challenge has made some delay in execution of works thus affecting procurement of new project vehicles. We see construction beginning to pick and demand for raw materials such as sand cement and general construction materials beginning to pick and this could hold as we start 2025,” Kavashe said.
Economic growth slowed in the first half of 2024, with real GDP growth averaging 4.8 per cent compared to 5.5 per cent in the first half of 2023, data by CBK indicates, with overall growth for the year having been revised downwards to 5.1 per cent from 5.4 per cent.
While inflation dropped to a 14-year low of 2.7 per cent in October, households continued to struggle with high living cost as commodity prices remained high, with government’s raid on payslips and multiple taxes on businesses affecting the spending power.
Nevertheless dealers cashed in on a relatively stable transport, construction, agriculture and retail sectors as trucks (3,939 units), both double and single cabin pick-ups (3,133), busses (1,205) and prime movers (522) remained the most selling.
During the year, Isuzu
retained its market lead with a 47.5
per cent of the total sales, offloading
5,390 units. CFAO Motors Kenya sold
3,789 units accounting for 33.4 per
cent share while Simba Corp Limited
closed the top three list with 977 units.
