Listen to This Article Enhance your reading experience by listening to this article.

Steve Umidha @SteveUmidha

New vehicle sales slightly rose 20 per cent in July compared to units sold in June, reflecting an improved demand amid the coronavirus outbreak, an industry body showed on Monday.

Data from Kenya Motor Industry Association (KMI) shows a total of 910 vehicles were sold last month compared to 756 units sold the previous month – a 20 per cent jump.

However, the pace in decline has been evident for most car dealers in the last five months owing to effects of the pandemic even though sentiments from industry observers predict better months ahead because of lifting of lockdown and certain restrictions by the government.

“July sales is an indicator of how the industry will play out in the months ahead,” commented Stephen Mbuthi – an auto expert.

Units sold

The July sales is also lower compared to 1,234 units sold in the same period last year – with the reported figures providing some perspective on the industry, whose numbers according to KMI Chairperson Rita Kavashe, are expected to weaken by about 30 per cent this year.

The industry had shown an early steady peak in February before the pandemic hit in a period that saw 1,049 units sold – the best in a single month the sector has seen since the start of 2020 and better than 857 the industry sold in a similar period last year.

Improved consumer sentiment buoyed by improving economy and gradual return of normalcy for most businesses are key indicators of better days ahead for car manufacturers who have sold a total of 5,532 vehicles since the start of the year compared to 7,444 units sold by the industry by this time last year.

A total of 6, 490 vehicles were sold in a similar period 2018 compared to 5,595 units sold in the same period 2017.

The demand for commercial and PSV vehicles have been on a free flowing decline since March as corporates and government institutions decelerated such purchases on slowed business operations that had been brought by government restrictions on movement and strict working procedures and guidelines.

With little money in circulation during that period, local banks and other financial institutions came to the rescue of borrowers and are now expected to extend capital relief to struggling businesses and individuals hit by the coronavirus pandemic.

Used cars

This means potential car buyers will now have an opportunity to talk to their banks on friendly terms of vehicle ownership.

On the flip-side, sales of used cars dropped by a range of between Sh150,000 to Sh1.2 million since the first confirmed case of the coronavirus was recorded on March 12.

Dealers say they have been forced to cut prices for cars such as Mazda Demio and Toyota Fielder among others, partly due to preference for newer or latest number plates.

The recent spiral in sale of distressed sales of cars which are under the hammer have also served to expand supply in this market segment.