Stable prices spur growth in second hand car sales by 30pc
Second hand vehicles on sale on Mombasa Road in Nairobi. Photo/FILE
What you need to know:
Data shows 11,831 units sold in January and February buoyed by stable prices.
The 30 per cent growth is the fastest in five years and comes in period that saw new cars sales jump 49.9 per cent to 4,223 units in quarter one.
The Kenya Auto Bazaar Association attributed the sales jump to the ease of accessing loans and stable car prices.
Sales of second-hand motor vehicles grew 30.2 per cent in the first two months of the year buoyed by stable prices.
Data from the Kenya National Bureau of Statistics shows that 11,831 used vehicles were sold in the period to February compared to 9,080 units in the same period last year.
The 30 per cent growth is the fastest in five years and comes in period that saw new cars sales jump 49.9 per cent to 4,223 units in quarter one.
The Kenya Auto Bazaar Association attributed the sales jump to the ease of accessing loans and stable car prices.
“Prices have remained stable in the past one year and those who holding back hoping cars would be cheaper are back in the market,” said secretary-general Charles Munyori.
“There are a lot of financing opportunities including company-funded schemes and asset financing. This has encouraged buyers as there are very few cash purchases.”
The unchanged car price is the product of a stable exchange rate over the past 18 months.
Car prices had been on the rise since 2011 when the shilling weakened sharply against major currencies, increasing the cost of new vehicles by about 30 per cent. The rise kept buyers away from the market. But the rates have remained little changed from last year, save for the new models.
Dealers attribute the flat prices to stable exchange rate with the shilling trading at between Sh84.50 and Sh86.50 for the better part of the past 18 months.
A second hand Toyota NZE model goes for about Sh1 million and according to Mr Munyori, little changed compared to last year’s rates.
The new model of the same brand is retailing at Sh1.5 million. Last year, the used car sales rose 24.3 per cent to 76,122 units.
The 49.9 per cent rise in new car sales marked the biggest quarterly jump in more than a decade with purchase of pick-ups and trucks being the biggest driver of the growth in what could see the dealers break last year’s annual peak sales of 14,542 units.
Counties and the construction sector boosted sales in the pick-up and truck segments while orders from the government, private companies, and wealthy individuals benefited other new car dealers.
Most of the small business owners and the middle class prefer to buy second-hand vehicles, which has seen the used cars account for more than 80 per cent of all vehicles sold in the country.
New vehicle sales accounted for 17 per cent of the 90,664 units sold last year, further losing market share compared to 2012 when they accounted for 17.3 per cent of 74,223 sold units.
The huge appetite for used cars prompted Toyota Tsusho, the parent firm of Toyota Kenya, to establish a separate unit (Toyotsu Auto Mart) last year that deals in a wide range of second-hand brands including Toyota and Subaru.
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