The slow movement of units has also been affected by high political tension that has seen prospective buyers adopt a wait and see attitude.
Motor vehicle dealers have also complained that there was a shortage of number plates.
Young professionals wishing to own vehicles hardest hit by the trend.
Sales of second-hand vehicles have dipped sharply over the past six months as industry players blame the cap on bank interest rates.
The slow movement of units has also been caused by an increasingly tense political environment that has seen many prospective buyers adopt a wait and see attitude ahead of the August 8 polls.
Kenya Auto Bazaar Association (KABA) secretary, Charles Munyori, said the capping of interest rates has limited credit access to middle income earners, who now cannot access funds to buy vehicles.
“The law was well intended but it has come to haunt the industry. What has happened since its enactment is that banks have become more stringent on those applying for loans because of increased risk so loans are not as accessible as they were,” Mr Munyori said, adding that young professionals wishing to own vehicles have been hardest hit.
Many young Kenyans in the early stages of their career lack assets that can be used as security demanded by banks.
“We are talking of more than 50 per cent decrease in imports. Where the sector sued to import up to 8,000 units every month, now we are importing slightly more than 4,000 because orders have dwindled,” he added.
Number plate shortage
Motor vehicle dealers have also complained of a shortage of number plates, and have asked the National Transport and Safety Authority (NTSA) to address the problem.
Car Importers Association of Kenya (CIAK) chairman, Peter Otieno, said at least 3,000 vehicles were lying at various Container Freight Stations (CFSs) in Mombasa awaiting plates.
“We are incurring storage charges of Sh3,000 each day a vehicle overstays in the CFS and when we ask the NTSA what the problem is they promise to solve it but do nothing,” he said, adding that initially they were allowed to clear vehicles as they waited for number plates.
However, NTSA is denying that this is the case.
“We send them to Mombasa daily and really there is no shortage,” NTSA deputy director corporate affairs and communications, Ms Dido Guyatu, said.
She however declined to give the number of plates that are dispatched to Mombasa port daily.
