New vehicle dealer sales rise 11pc in first quarter

 Arvinder Reel

Toyota Kenya Managing Director Arvinder Reel. FILE PHOTO | NMG

Sales of new motor vehicles rose 11.7 percent in the first quarter ended March, aided by the growing economy.

Data from the Kenya Motor Industry Association (KMI) shows that the formal dealers including Isuzu East Africa, Toyota Kenya and Simba Corporation sold 3,203 units in the review period, up from 2,867 units a year earlier.

The performance marks continued recovery in the industry, which suffered reduced sales in 2020 due to the impact of the Covid-19 pandemic, including restriction of movement, business disruption and reduced incomes for firms and households.

Economic growth contracted 0.3 percent in 2020 but recovered to post a 7.6 percent growth last year after the restrictions were removed in response to the receding pandemic.

Toyota dealer CFAO Motors Kenya had the highest sales growth among the major dealers in the first quarter ended March.

Its unit sales increased to 770 from 608, representing a 26.6 percent jump.

The dealer’s market share subsequently expanded to 24 percent from 21.2 percent.

CFAO Motors has, however, announced that its 2022 full-year sales could drop by some 700 units due to a semiconductor chip shortage that is hurting the supply of vehicles to customers.

“It [sales] is coming down because currently, we have a few challenges all over such as getting the chips,” Mr Arvinder Reel, the firm’s managing director, told the Business Daily earlier.

“At this point in time, we cannot meet our demand. We have more demand than supply and we hope that we can catch up with production in the next few months.”

Other dealers including DT Dobie had also warned of a potential sales decline due to the chip crisis which is expected to continue into 2023.

Some automakers have resorted to doing away with high-tech systems like park assist and touchscreens as the shortage bites.

Semiconductors are used in electronic devices and are critical components in modern cars.

Isuzu, which sells its namesake vehicles, grew its sales 3.7 percent to 1,215 from 1,171.

Its market share, however, declined to 37.9 percent from 41 percent.

Simba Corporation’s sales meanwhile dropped to 339 from 410, contributing to its market share falling to 10.6 percent from 14 percent.

The dealer sells Mahindra pick-ups, Proton passenger cars, Ashok Leyland trucks and Mitsubishi trucks, and sport utility vehicles.

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