Sales of new vehicles have bounced to the strongest levels in six years on the back of falling lending rates, a stable exchange rate and renewed business confidence that has lifted demand for commercial units.
Data from the Kenya Motor Industry Association (KMIA) shows that new vehicle sales rose 24.56 percent in the first nine months of 2025 to 9,924 units from 7,967 units in the same period last year.
The sales nearly match the January-September 2019 levels at 9,940 units, signaling a full recovery for the industry after years of volatility triggered by Covid-19 pandemic disruptions, followed by global supply chain bottlenecks, forex currency turmoil and increased taxation.
The rebound has been driven largely by demand for commercial vehicles, reflecting renewed activity in transport, infrastructure and industrial sectors.
Purchases of trucks jumped 43.19 percent to 3,992 units, while medium buses (21–40 seats) climbed 26.90 percent to 887 units. Small buses (9–20 seats) posted a stronger growth of 74.80 percent to 860 units, prime movers (heavy-duty truck used to pull trailers) sales jumped 56.72 percent to 525 units, while single cabs also posted double-digits (13.34 percent) gains to 1,478 units.
Isuzu East Africa and CFAO Mobility Kenya --the two dominant dealers and assemblers that accounted for 79.99 percent of total local sales-- recorded the biggest growth in sales in the review period.
Isuzu —which sells pick-ups, buses, trucks and sport utility vehicles (SUVs)-- moved 4,670 units in the nine months to September, a 27.04 percent jump from 3,676 a year earlier, the KMIA data shows.
CFAO, which sells multiple brands such as Toyota, Mercedes, Volkswagen and Hino under one roof following the merger of Toyota Kenya and DT Dobie operations in May 2023, grew deliveries 21.13 percent to 3,268 units from 2,698.
Simba Corp, which holds franchises for Mitsubishi, Proton, Ashok Leyland and Mahindra, closed deals for 881 vehicles —a 10.13 percent rise over 800 units in the same period of prior year. Tata Africa Holdings sold 371 units, a 24.08 percent climb over 299 vehicles a year ago.
The increased sales of showroom vehicles underscores the resilience of locally assembled brands that benefit from lower import duties compared to fully built imports.
The resurgence in vehicle orders comes after a bruising four-year period marked by global supply chain bottlenecks, increased taxes on imported vehicles and elevated lending rates that hurt consumer and corporate purchasing power.
“The storm is over because of the positive macroeconomic indicators with promising signs of recovery and growth,” Isuzu East Africa told the Business Daily mid-April.
“Sales in 2025 are being driven by falling interest rates, stable forex exchange rates and stable inflation.”
A major factor behind the rebound in new motor vehicle sales this year is easing of borrowing costs.
The average lending rate by commercial banks fell to 15.17 percent in August 2025 from 16.84 percent a year earlier and a recent peak of 17.22 percent in November 2024.
This followed successive rate cuts by the Central Bank of Kenya, which has trimmed its benchmark rate from 13 percent in mid-2024 to 9.25 percent currently, easing the cost of financing vehicle purchases.
Lower cost of asset financing has helped corporate clients largely in logistics, construction and public transport segments to step up fleet renewals.
The relatively stable shilling this year, hovering between 129 and 130 units per US dollar, has also helped contain the cost of imported parts and units, stabilising showroom prices and boosting margins for the dealers.
The Kenya Revenue Authority increased duty on shipping cars into the country from 25 percent to 35 percent from July 2023 after the East African Community Council of Ministers approved Kenya’s application to levy a higher rate than the 10 percent common external tariff(CET) for the seven-nation EAC bloc.
Importation of vehicles further attract excise duty ranging from 25 percent to 35 percent depending on the size of the engine, in addition to the standard 16 VAT.
Excise tax is charged on the sum of landed cost of the car and import duty, while VAT is applied on the resultant value [the sum of landed cost, import tax and excise duty].
The Ruto administration has signaled intention to shift incentive packages for local automotive assembly industry to nascent electric motor vehicles assembly industry.
“Transitioning to electric mobility (e-mobility) remains a priority intervention of the Government’s inclusive green growth and climate action plan aimed at reducing greenhouse gas emissions and air pollution while at the same time meeting the mobility needs of consumers,” the Treasury wrote in the 2025 Budget Policy Statement in February.
“Electric vehicles and motorcycles are an important breakthrough toward bettering air quality and easing traffic in busy cities because of their quiet operation and lower running costs as compared to fuel diesel buses.”
Isuzu earlier said that the industry is a long way off due to infrastructure challenges and the technology is yet to be developed to allow long haul commercial vehicles to support electric batteries.
"The starting point has been passenger and small motor vehicles because of battery swapping capabilities," the company said.
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