Sale of new cars dips in November
By Steve Umidha, December 16, 2022
New vehicle sales remained strong in November but fell short of last year’s performance, bringing year-to-date total sales to 11,962 for 2022, the latest data by the Kenya Motor Industry Association shows.
It means that the auto sector sold 788 less units at this stage of the year compared to a similar period 2021.
Sales had slowed significantly since rebounding in the third quarter from what has been a generally “good” year hampered by elections and other external factors like the war in Ukraine when vehicle manufacturers were able to fulfill order backlogs and dealers restock as supply chain shortages eased.
Supply chain
The easing of supply chain bottlenecks was attributed to the improved sales, albeit marginal, coming on the back of August 9 General Elections which had contributed to low sales months earlier.
Industry insiders say the weakening consumer sentiment could also be as a result of the fact that most consumers are now focused on the holiday festivities with car purchases no longer a priority to the majority of the consumers.
Generally, the consumers’ preference for SUV and light commercial vehicles has continued to grow in the last months, making up a chunk of total cars sold in 2022, with the likes of Simba Corporation unveiling the Proton X70, the flagship model of the Proton brand in the Kenyan market this month, pointing to a growing appetite for the SUV segment.
“We started this journey two years ago with the assembly of the Proton SAGA at our AVA facility in Mombasa. The local assembly of Proton SAGA has helped us to introduce the Proton brand into the Kenyan market,” Dinesh Kotecha, CEO of Simba Corporation said during the launch, projecting a “better than expected year” for auto dealers.
Typically, the months of September, October and December tend to see car manufacturers extend discounts to get sales across the line.
However, with Central Bank of Kenya hiking interest rates to fight inflation, consumers could in the coming months find the cost of financing a new car suddenly a lot higher than it was previously.