High prices cut sales of new cars by 4.8 per cent

• Data from the Kenya Motor Industry Association (KMI) shows that new vehicle sales stood at 7,024 units in the year to June compared to 7,379 units the year before.
• The slump has been linked to a rise in vehicle prices by an average of 30 per cent, driven by the weakening of the shilling in last year’s second half. This has put off customers in what is threatening to hurt earnings of the dealers.
• Data from the Kenya National Bureau of Statistics (KNBS) shows that 1,562 saloon cars — including new units — were registered in June compared to 799 units in May. Registrations of station wagons doubled to 5,045 units from 2,573 units in the same period last year.

Sales of new vehicles fell 4.8 per cent in the first six months of the year, weighed down by high prices of old stocks.

Data from the Kenya Motor Industry Association (KMI) shows that new vehicle sales stood at 7,024 units in the year to June compared to 7,379 units the year before.

The slump has been linked to a rise in vehicle prices by an average of 30 per cent, driven by the weakening of the shilling in last year’s second half. This has put off customers in what is threatening to hurt earnings of the dealers.

A survey by Business Daily found that the dealers are absorbing up to 10 per cent of the price inflation.

The reduced demand for new vehicles comes at a time when second hand car dealers are building up stocks in anticipation of renewed demand on lower inflation and interest rate environment.

Data from the Kenya National Bureau of Statistics (KNBS) shows that 1,562 saloon cars — including new units — were registered in June compared to 799 units in May. Registrations of station wagons doubled to 5,045 units from 2,573 units in the same period last year.

ALSO READ: Car dealers build stocks as cheaper loans boost demand