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New vehicle sales rose by 14 percent in February to hit 1,984 units compared to 1,738 cars sold in a similar period last year, industry statistics show.

Kenya Motor Industry Association (KMI), a lobbyist for the formal motor sector, says the data shows an impressive and best performance in a single month for carmakers who sold 1,680 new cars in a similar month in 2019 and 1,969 total units a year earlier. That growth, is however, not expected to sustain in the coming months, according to industry predictions.

Arvinder Singh Reel, managing director of CFAO Motors Kenya, formerly Toyota Kenya, lists volatile exchange rates, looming general elections as well as overseas logistics challenges as some of the factors that could see players register low figures this year. “We could see possibly similar numbers as last year as we expect a lot of challenges this year which may also be affected by global prices of crude oil and the pending automobile policy still at the Ministry of Transport,” he stated in a previous interview with Business Hub.

Further, with the number of infrastructure projects coming to their tail end owing to the looming general elections, Dinesh Kotecha, Group chief executive of Simba Corporation, the manufacturer of Mahindra brands, believes that car dealers will likely see a reduction in government contracts as the new administration takes office after the August national polls.

Auto dealers’ businesses were adversely impacted by Coronavirus hangovers but are now angling for new opportunities with CFAO Motors, for instance, venturing into the car trade-in business model as a new strategy to grow sales of its new vehicles in a deal announced on Tuesday.

The automobile firm which rebranded to CFAO Motors will, however, remain the exclusive distributor of brand new Toyota vehicles and genuine parts in the Kenyan market. On Tuesday, CMC Motors Group partnered with Stanbic Bank to launch Ford Finance scheme to enable clients to access competitive and flexible financing solutions for Ford vehicles in Kenya. The partnership will see the Ford Motor Company, CMC Motors Group Ltd, Stanbic Bank Kenya and Standard Bank of South Africa come together to enable clients within Kenya to afford new Ford units.

Repayment tenures

Speaking at the Partnership launch, CMC Motors Group CEO Alan Crossan said the initiative comes when the economy is steadily recovering from the harsh effects of the Covid-19 pandemic. “This will be a sigh of relief as the facility will enable customers to enjoy interest rates as low as 10.71 per cent and comfortable repayment tenures of up to 60 months with no collateral required to access the asset,” he said.

Stanbic Bank Kenya Head of Business and Commercial Clients, Florence Wanja, said the deal would enable Kenyans to acquire brand new vehicles at affordable pricing and flexible financing options.

“This partnership will be important in enabling our clients to gain access to new units that will give them service for longer with less downtime, increasing productivity,” she added.

Domestic car dealers ended 2021 on an electric high, selling an impressive 14, 250 new car sales in 12 months to December despite a tumultuous year occasioned by Covid-19.

Higher spending from buyers and ease of the economic disruption of Coronavirus restrictions as well as cheaper financing options by the banks were all mentioned as reasons for last year’s growth.