New vehicle sales up 20pc to 14,000 units
New vehicle unit sales peaked at 19,966 in 2015The sales dropped to 13,869 and 11,044 in 2016 and 2017, respectively. The sales rebound partly reflects renewed business confidence following the conclusion of the 2017 General Election.
Sales of new vehicles in 2018 topped the 14,000 units mark, a growth of more than 20 percent compared to the previous year, reversing a two-year slump that started in 2016. Data from the Kenya Motor Vehicle Industry Association (KMI) shows that formal dealers, including Isuzu East Africa, Toyota Kenya and Simba Corporation, sold 13,223 units in the 11 months ended November. This is a 19.7 percent rise compared to 11,044 units sold in the whole of last year.
KMI chairperson Rita Kavashe, who is also the chief executive of Isuzu, said the industry estimates the December sales to have closed at 1,200 units in what will raise this year’s total volumes to 14,423.This will nearly match the 14,542 units sold in 2013 and usher in a new growth trend. New vehicle unit sales peaked at 19,966 in 2015 and dropped to 13,869 and 11,044 in 2016 and 2017, respectively.“We expect that sales in 2019 will rise by 10 percent,” Ms Kavashe said, adding that drivers of the demand will include leasing to the National Police Service, purchases by county governments and logistics firms.
The sales rebound partly reflects renewed business confidence following the conclusion of the 2017 General Election.Ms Kavashe, however, said the cap on lending rates continues to stifle demand, noting that most purchases were financed by bank loans.Lenders have responded to the capping of interest rates by advancing to the government and blue-chip firms, locking out a large number of prospective individual and SME borrowers.The maximum lending rate by banks is currently set at 13 percent, having come down from 18 percent prior to the introduction of interest rate controls in September 2016. Lenders say the thinner lending margins in the current environment cannot accommodate riskier borrowers, a move that has led to a major credit slowdown.