GM widens lead over Toyota on growing demand for trucks
General Motors East Africa (GMEA) widened its lead over closest rival Toyota Kenya in the first half of the year as it benefited from increased demand for Isuzu commercial vehicles.
Data from the Kenya Motor Industry Association (KMI) show that GMEA sold 1,570 units in the six months to June compared to 1,243 units last year, raising its market share to 27 per cent in June from 25 per cent in December.
Toyota, which sold 1,505 units compared to 1,509 units in the same period last year, saw its market share rise to 25 per cent in June compared to 24 per cent in December.
These performances saw GMEA increase market share gap against Toyota to two percentage points in June, compared to one in December in the half-year period that new car dealers witnessed a 4.2 per cent drop in sales.
GMEA managing director Rita Kavashe attributed the firm’s market share growth to growing demand for its Isuzu brand of buses, pick-ups, buses and light commercial trucks.
“Demand for our commercial vehicles remains strong,” she said, adding that the company’s bus sales continue to benefit from the government’s move to ban 14-seater vans in the public transport.
Toyota and GMEA have been locked in a battle for supremacy in the new vehicle market since GMEA first grabbed leadership from Toyota in 2010.
Increased demand for GMEA’s buses pushed its market share to 26.2 per cent in 2010, overtaking the 23.2 per cent of Toyota which is set to venture into bus and heavy commercial market to grow sales.
Sales in the overall industry fell 4.2 per cent in the first half to 5,881 units from 6,140 units a year earlier, a move that threatens to hurt earnings.
The weakening of the shilling against the dollar and Japanese yen last year has pushed up vehicle prices by an average of 30 per cent, with the dealers absorbing up to 10 per cent of the price inflation, according to a survey by Business Daily.
Subaru Kenya, for instance, is absorbing between five per cent and seven per cent of the exchange rate-driven inflation while GMEA is taking up to 10 per cent of the price increase.
“It is not possible to pass on the entire cost to customers when the high interest rates have also slowed down demand for new cars,” said Anthony Maina, the general manager at Subaru Kenya.
Government have been particularly affected as the State pays based on the quotations, which may not reflect the exchange rate.