The average cost of imported cars in Kenya slid 15.2 per cent to Sh931,815 per unit in the nine months to September 2017, indicating a shift by buyers towards budget vehicles.
Official data shows that the country shipped in 65,249 units of vehicles at a cost of Sh60.8 billion between January-September, translating to an average of Sh931,815 per unit.
In a similar period of 2016, Kenya imported 59,700 vehicles, which was nine per cent fewer units than last year’s but at a steeper cost of Sh64.1 billion, according to Kenya National Bureau of Statistics (KNBS).
The 2016 car import bill translates to an average of Sh1.1 million per unit, which is Sh168,185 costlier than last year’s average unit cost of Sh931,815.
This indicates a shift towards low-priced imported cars among local buyers who battled a tough economic climate in the 2017 year punctuated by an acute credit squeeze from banks and prolonged election cycle.
“More people are going for small budget cars such as Toyota Belta,” said Charles Munyori, secretary-general of Kenya Auto Bazaar Association, a lobby group for second-hand car dealers.
“Increased use of services such as Uber definitely has a hand in this as young people buy units they can afford for business.”
Taxi-hailing firm Uber last September said that it had 363,000 active users in Kenya, making it the second biggest market in Africa after South Africa, which has 969,000 active riders.
Uber said 5,000 and 12,000 Uber drivers were signed up in Kenya and South Africa, respectively. Besides Uber, other firms are Taxify, Little, ShareCab and Mondo Ride, underlining Kenya’s huge market for the taxi-hailing apps.
Kenya’s car market is dominated by low-priced second-hand imports from countries such as Japan.
Local car assemblers have been seeking to wrest market share from used car sellers who account for about 80 per cent of vehicle sales.
French automaker Peugeot through local dealer Urysia last September started assembly of its brands at Thika-based Kenya Vehicle Manufacturers as did German-based Volkswagen, churning out its Polo Vivo model.
Thika’s KVM and Mombasa-based Associated Vehicle Assemblers (AVA) are the only facilities that offer contract production, with Isuzu East Africa running a facility exclusively for its brand of commercial vehicles.