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Economy

Porsche, BMW fail to make sales for 2 months in luxury car slowdown

BMW showroom
Slow down linked to government scrutiny on individuals’ lifestyles in the war on corruption and tax cheats. FILE PHOTO | NMG 

Luxury car market was hit by a slowdown in the first two months of the year that saw top brands Porsche and BMW fail to make a single sale.

Data released this week by Kenya Motor Industry Association (KMIA) shows sales of Land Rover that also includes Range Rover dropped to eight from the 14 reported in the first two months of last year.

Dealers in new luxury cars have witnessed flat growth in sales in the last three years in what industry analysts have linked to increased government scrutiny on individuals’ lifestyles in the war on corruption and tax cheats.

Reduced flow of bank loans after the government introduced the lending rates cap in September 2016 has also hurt auto dealers.

The cap has had the effect of stifling the credit market as banks became more cautious in their lending practices.

Jaguar, which is under UK-controlled luxury car dealer Inchcape Plc together with Land Rover and BMW, sold one unit in the two months.

“For the first two months, we’ve never reported any sales but we are expecting vehicles this month in the country this month. We have sales but we cannot report before we hand over the car to the customer,” Inchcape Kenya marketing manager Charity Mutunga said on phone.

Mercedes brands

DT Dobie, however, bucked the trend in the luxury car market after sales of its Mercedes brands increased to 49 units in the two months compared to the 32 cars it sold in the same period last year.

But DT Dobie sold one Jeep Grand SUV, down from two in a similar period a year earlier.

Overall, sale of new vehicles fell by 289 units, or 14.68 percent, in the review period to 1,680, the KMIA statistics show.

Isuzu East Africa, which deals in commercial vehicles, reported the highest sales at 588 units in the two-month period, slightly higher than 531 vehicles 12 months earlier.

Sale of new Toyota brands, which controls the largest share of total Kenyan car market, fell to 349 from 403 units in 2018.

New unit sales by Mitsubishi fell to 292 from 306 units, while Nissan orders dropped by more than half to 49 units from 108 a year ago.

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