GM maintains lead as new car sales surpass 2008 peak
Isuzu truck on show. New vehicle sales last year recovered beyond the 2008 peak as General Motors East Africa (GMEA) cemented its position as Kenya’s leading auto dealer. Photo/FILE
What you need to know:
Data from the Kenya Motor Industry—the dealers lobby—shows vehicle sales last year grew 13.1 per cent to 14,542 units, surpassing the previous peak of 13,135 units recorded in 2008.
The recovery has been linked to increased demand for buses, pick-ups, and trucks from rising activities in the agriculture, transport and construction sector in the region.
New vehicle sales last year recovered beyond the 2008 peak as General Motors East Africa (GMEA) cemented its position as Kenya’s leading auto dealer.
Data from the Kenya Motor Industry—the dealers lobby—shows vehicle sales last year grew 13.1 per cent to 14,542 units, surpassing the previous peak of 13,135 units recorded in 2008.
The auto industry had over the past five years struggled to break the 13,000 units mark as the sector took longer to recover from economic shocks that hit Kenya in 2008 due to the global financial crisis and the country’s bloody post-election violence.
The recovery has been linked to increased demand for buses, pick-ups, and trucks from rising activities in the agriculture, transport and construction sector in the region.
This has benefited auto firms with a heavy presence in the commercial segment like GMEA and Simba Corporation—both recording the biggest unit sales jump at 13.8 per cent and 38.6 per cent respectively.
Simba’s market share grew 15 per cent from 12 per cent in 2012 while GM remained top dealer with a 27 per cent stake ahead of Toyota’s 24 per cent.
“There was a lot of demand for commercial vehicles, especially in the second half of last year,” said Rita Kavashe, GMEA’s chief executive.
She added that most of the orders came from the private sector, with the government having scaled down its purchases of vehicles in favour of leasing where it offered Toyota Kenya a contract to lease it 1,100 units.
The leasing contracts is worth about Sh3 billion but cars supplied through the deal are not captured in the sales data. GM and Simba have been the biggest beneficiaries of the growth seen in agriculture, transport and construction sectors that has significantly raised demand for commercial vehicles.
Agricultural output increased by 9.2 per cent to Sh335.7 billion in 2012 from Sh307.3 billion in 2008 while construction grew 28.7 per cent to Sh56.3 billion in the same period. The transport and communication sector grew 22.6 per cent to Sh198.2 billion in the period.
In the nine months to September last year, agriculture expanded by 5.1 per cent while construction and transport grew by 11 and 5.1 per cent respectively. The saloon car market —dominated by Toyota— in contrast has come under pressure from tight budgets in government and private companies who buy most of the units.
This saw Toyota diversify into the commercial segment last year with the introduction of Hino buses and trucks of which it sold 233 units. Sluggish demand for saloon cars saw GMEA overtake Toyota as Kenya’s largest auto dealer in 2010.
DT Dobie saw its market share drop to 12 per cent from 13 per cent despite its sales rising to 1,763 units from 1,626 units. Listed dealer CMC Holdings’ market share dropped to 7 per cent from 10 per cent, with the dealer having lost its flagship Jaguar Land Rover franchise in February last year.
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