Sales of luxury cars drop 15pc over polls, rate cap

Luxury cars that target the super-rich. FILE PHOTO | NMG
Luxury cars that target the super-rich. FILE PHOTO | NMG 

Sales of new luxury cars fell 15.1 per cent in the first nine months of the year, closely tracking the slump in the overall new vehicle market.

Orders for most high-end brands including Jaguar, Land Rover and Porsche dropped in the review period, with BMW and Mercedes the only makes registering growth.

Data from the Kenya Motor Industry Association (KMI) shows that the formal dealers moved 190 units, down from 224 units a year earlier.

This mirrors the total new vehicle market which saw an 18.7 per cent unit sales dip to 8,427 from 10,368 over the same period.

“Sales are down because of political uncertainty and the capping of interest rates,” said Sanjiv Shah, the chief executive of RMA Kenya which sells Land Rover and Jaguar cars.

Delayed financing

Mr Shah added that banks are now taking longer to approve financing for vehicles and have reduced the funding to lows of 60 per cent from the previous 90 per cent of a car’s value.

The less liberal financing of car purchases is part of the banks’ response to the control of interest rates starting September last year.

Unit sales of Land Rover models including Discovery and Range Rovers dropped to 56 in the nine months ended September compared to 74 a year earlier.

Porsche sales declined to 26 from 46 while Jaguar’s dropped to 16 from 27 as orders for Jeep Grand Cherokee contracted to six from 14.

BMW bucked the trend, more than doubling sales to 34 from 16. Orders for Mercedes also rose to 50 from 47.

Bentley debut

The period saw the debut of Bentley whose local dealership was recently secured by transport firm Multiple Group.

Two Bentleys –Bentayga (SUV) and Continental GT (coupé)— were sold in September.

The entry of Bentley underlines increased spending on luxury items by Kenya’s super-rich whose ranks have grown in the past decade thanks to overall economic expansion and a rally in the price of specific assets including real estate.

Bentley and Porsches are targeted by the newly rich and those seeking distinction in a market that has long been dominated by Mercedes and Land Rovers.