Toyota’s market share hits lowest level in 8 years
Toyota Kenya showroom along Uhuru Highway, Nairobi. Photo/FILE
What you need to know:
Toyota recorded a 11.3 per cent drop in units in the first half year to 1, 335 despite industry new car sales being up 8.6 per cent to 6,390 units in the period.
Players in the industry reckon that the Japanese car dealer is losing steam due to its small presence in the trucks and buses segment, which has become a market share driver for rivals like General Motors.
Despite the reduced sales, Toyota maintained its position as the second largest dealer after General Motors East Africa which also recorded a lower market share despite raising unit sales.
Toyota Kenya’s market share in the first half of the year has dropped to its lowest level in eight years on reduced demand for new saloon cars.
Data from the Kenya Motor Industry Association (KMI) shows that Toyota recorded a 11.3 per cent drop in units in the first half year to 1, 335 despite industry new car sales being up 8.6 per cent to 6,390 units in the period.
This cut its market share from 25 per cent last June to 21 per cent—which is the lowest since 2005.
Players in the industry reckon that the Japanese car dealer is losing steam due to its small presence in the trucks and buses segment, which has become a market share driver for rivals like General Motors.
Toyota’s market share has dropped from a high of 26.1 per cent in 2006. How to tackle the market erosion remains the top priority of its new CEO Sachio Yotsukura, who became the fourth chief executive in two years in March.
The saloon market has remained sluggish on reduced demand from corporates and the government as well as increased competition from cheaper used cars.
Sales of the passenger cars fell 24.6 per cent to 2,307 units last year compared to 3,060 units in 2007 while sales of commercial vehicles held steady at 10,000 units.
This prompted Toyota to enter the bus and trucks market with the Hino brand in February, with the company selling 21 units of the new brands as of June.
Despite the reduced sales, Toyota maintained its position as the second largest dealer after General Motors East Africa which also recorded a lower market share despite raising unit sales.
GMEA’s sales rose to 1,605 units from 1,570 units in the period but its market share fell to 25 per cent from 27 per cent. GMEA has also expanded its vehicle brand portfolio, introducing Chevrolet pick-ups last month to diversify away from the mainstay Isuzu commercial vehicles.
DT Dobie, an affiliate of Toyota Kenya, also lost market share despite growing sales. The company’s sales rose to 851 units from 812 units but its market share dropped to 13 per cent from 14 per cent.
The drop in market share for Toyota and DT Dobie is set to calm fears that the dealers, who are commonly owned, will rise to dominate the new vehicle market.
Simba Corporation was the biggest beneficiary of the Toyota and GMEA market share losses, with the dealer’s share rising to 17 per cent from 11 per cent.
The dealer gained from increased demand for its Mitsubishi trucks that saw its total sales jump 67.5 per cent to 1,074 units. “Our Mitsubishi sales have grown due to increased economic activities,” said Simba’s marketing manager Mehul Sachdev.
