Small car dealers grow sales at expense of dominant rivals

Small new vehicle dealers used lower pricing to record a larger market share growth in the five months of the year at the expense of their dominant rivals.

Data from the Kenya Motor Industry Association (KMI) shows that small dealers like Tata Africa, Subaru Kenya and CICA Motors increased their market share to 14 per cent in the period, up from 13 per cent a year earlier. This is the largest market share ever recorded by the smaller dealers that controlled only 6.5 per cent of the market in the whole of 2010.

The rapid growth has been linked to the relatively lower prices of the mostly Asian car brands they stock, a move that has seen them wrest market share from General Motors East Africa, Toyota Kenya and Simba Corporation.

“Customers are increasingly looking for lower prices,” said Naresh Leekha, the executive director of Tata Africa.

He added that the smaller dealers are mainly selling pick-ups and light and heavy commercial trucks that are cheaper by 15 to 30 per cent compared to those stocked by established players.

Large dealers, including Toyota and GMEA, specialise in European and Japanese brands that have traditionally cost more compared to Chinese and Indian brands. KMI data shows that small dealers grew their sales eight per cent to 714 units in the five months to May compared to 609 units a year earlier.

This came as Toyota’s sales dropped 11.5 per cent to 1,069 units from 1,208 units, reducing its market share to 21 per cent from 26 per cent. GMEA also saw its market share shrink to 25 per cent from 27 per cent as sales remained flat at 1,304 units. 

DT Dobie, CMC Holdings, and Simba Corporation were the only major dealers to grow sales and market share during the period.