GM the biggest gainer as sales of new cars hit record
A transporter tests a newly acquired truck at the General Motors Eat Africa showroom in Nakuru. PHOTO | FILE
What you need to know:
New motor vehicle dealers sold 19,996 units last year compared to the 17,616 units sold in 2014.
GMEA was the largest beneficiary of the sales boom seen last year, selling 6,690 units of its Isuzu and Chevrolet brands in the period compared to 5,118 units in 2014.
Simba Corp grew its sales of brands including Mitsubishi and BMW from 2,960 units to 3,430 units, boosting its market share slightly to 17.1 per cent from 16.8 per cent.
New motor vehicle dealers set a new sales record last year, moving 19,996 units in the period powered by increased economic activity.
This represented a 13.3 per cent growth compared to the 17,616 units sold in 2014 as dealers with a big presence in the commercial vehicle segment like Simba Corporation and General Motors East Africa (GMEA) benefited the most from the sales boom.
Industry players expect relatively sluggish growth this year, citing several negative factors that have recently taken root or are expected to materialise in the coming months.
“We are expecting this year’s sales to reach 21,000 units,” said Rita Kavashe, the chief executive of GMEA.
“Higher taxes, increased political activities ahead of the general election and macroeconomic challenges risk weighing down demand.”
She noted that sales of commercial vehicles rose the fastest, benefitting from demand in sectors like retail, agriculture and construction.
GDP statistics for the third quarter show that construction and agriculture made the largest contribution to the 5.8 per cent economic growth in the period, with construction expanding by the largest margin at 14.1 per cent.
The new Excise Act has roped in locally assembled vehicles on which a flat levy of Sh150,000 became applicable since December in a move that will inflate prices of pick-ups, buses and trucks.
The weakening of the shilling against the dollar, has also made vehicles more expensive.
Most buyers of new vehicles rely on bank financing and the rise in interest rates is expected to slow down demand.
New developments in the money markets point to a rise in the cost of credit, with the benchmark short-term treasuries hitting 14.3 per cent on Thursday.
New vehicle dealers have seen sales rise for six consecutive years, recovering from the 2009 dip that was caused by post-election violence and the global financial crisis.
GMEA was the largest beneficiary of the sales boom seen last year, selling 6,690 units of its Isuzu and Chevrolet brands in the period compared to 5,118 units in 2014. This raised its market share from 29 per cent to 33.5 per cent.
Simba grew its sales of brands including Mitsubishi and BMW from 2,960 units to 3,430 units, boosting its market share slightly to 17.1 per cent from 16.8 per cent.
Toyota, the second largest dealer after GMEA, saw its sales decline to 4,151 units as its market share shrunk to 20.7 per cent from 27 per cent.
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