- SUVs and station wagons are replacing saloon cars on the roads.
Have you ever wondered why we drive the vehicles we choose? Because we all have unique needs and wants it is impossible to find a one size fits all vehicle.
Grace Kariuki, 27, just bought her first vehicle. She consulted friends but admits cost of service did not even come to mind when picking her vehicle.
In hindsight it now features at number five on her list. Top of her mind originally was safety for her child, fuel efficiency, price, space, finance and insurance followed by speed, colour, status and finally resale value.
Peter Mayavi, 35, on the other hand was keen on performance and fuel efficiency followed by price and how the vehicle makes him feel and look. He believes a vehicle is a key part of a man’s brand and one must choose very carefully. Finance/insurance and cost of service featured at number five and six consecutively on his list followed by safety, space, colour and resale value.
Kenyans today are buying more crossovers and large SUVs and not for the reasons they were initially designed for. Few ever take them offroad anyway so the reasons now include prestige, safety, space and ground clearance.
According to Kenya Motor Industry Association (KMI) statistics, Kenyans purchased just over 1,200 brand new SUVs between January and September this year. While majority of these are likely to be for government use, it was interesting to note most have engines with more than 2500cc. Only 130 brand new saloon cars were bought, meaning SUVs are still preferred. New vehicles make up about 15 percent of the market, the rest being used cars.
In the larger used car segment the trend was similar. In 2018 a total of 9,838 saloon vehicles were registered compared to 61,816 Station wagons and SUVs. Just over 50,000 used SUVs and station wagons were registered in 2017 and less than 10,000 saloon cars.
Despite the hard economic climate these numbers are expected to grow marginally in 2019 with 6,916 saloon registered by September and 55,620 station wagons and SUVs already logged with three more months to go before the end of the year.
The automotive market has been depressed lately with less money in circulation as the government’s austerity measures grip pockets. This has affected the high-end market with most people looking to spend less than 2 million on a used cars. Over the last 24 months Kenyans have continued to embrace Toyota, Nissan and Honda brand but opened up to the idea of “new” nameplates such as Mazda and Suzuki. We have seen a growth the popularity of Volvo and Mitsubishi crossovers.
In the premium segment Audi has found new takers and this might be related to price. Most drivers looking for a high-end vehicle European brand will first start with Mercedes and BMW. Then turn to the Audi and Lexus brands before looking at VW, Volvo and Peugeot.
According to Kenya Auto Bazaar Association chair, Major (rtd) John Kipchumba, majority Kenyans are still going for Toyota, Nissan and Honda in that order. Their key concern is availability and cost of spare parts. The current trend is to opt for engine size of between 650cc and 1800cc to maximize efficiency as most will want to list their vehicle with a taxi hailing app.
A quick glance and what is in stock at most car yards it is clear that Toyota leads and Nissan is growing in reputation followed by Subaru. Mazda and Honda are doing well in the smaller sized vehicles. Online vehicle sale platform Cheki, for example, has over 3,147 Toyotas and only 921 Nissans and 464 Subarus from a total of just over 7,900 vehicles. Mazda and Honda had 386 and 332 respectively. SUVs take the large chunk at 2,364 against Hatchbacks at 1,639 followed by saloons at 1,420. Station wagons which include the Subarus are at 1,216 units. Because Cheki list vehicles from across the used car market it gives a good indication of what is available.
On SBT Japan, a car import website, there were over 40,000 vehicles listed with 10,000 of those being Toyotas. Nissan follow with 2,787 and Mercedes with 2,143. Nissan, Hyundai, Honda, Volkswagen, Mazda and BMW as well as Volvo, Mitsubishi and Audi were also in the top ten list of cars available on SBT Japan.
How Kenyans buy cars
Over 90 per cent of vehicles on East African roads are pre-owned imports from two key markets, Japan and the UK. A few are now coming from Australia and South Africa.
I started by asking leading vehicle sales professionals what concerns their customers the most. Clara Wambugu’s MHH customers are aged between 35 and 70 and looking for used vehicles from the UK. Their key concerns is cost of service, purchase price, status, followed by insurance and safety. Lower down their priority comes efficiency, speed, colour, resale value and interior space.
Robert Gichuki of CMC Motors sells new cars to middle and high-income earners and they are more focused on price, speed/power, cost of service, fuel efficiency and finance. Bottom of their worry list was colour beaten only status, interior space and resale value.
Most consumers have a budget the vehicle needs to fit into. Many of the few buying a brand new showroom vehicle were more concerned with the price, safety and vehicle warranty. This was followed by space, finance and insurance. A good number asked about fuel efficiency and resale value. Perception and vehicle colour were the least of their concerns.
A luxury vehicle salesman who preferred to remain anonymous said “My customers are keen on the status the car represents. Perception of the peers was important for them. This was followed closely by safety, space, speed and power. Least of their concerns was price, cost of service, colour, resale value and fuel efficiency.”
Those buying used vehicles had a different set of priorities. Karimi, a professional Kenyan based in one of Europe’s capitals, has owned a used Volkswagen Tiguan. For her next vehicle priorities are safety, efficiency, price, cost of service and space. Bottom of her worries are status, resale value, space and colour. She is single and thinks it will most likely be a red convertible.
According to Reagan Kibugi of Windsor Motors on Kiambu Road, customers are looking for smaller more efficient and less ostentatious vehicles.
William Maina of PRG Motors along Langata Road, they had to shut down their previous used car yard after six years, scaling down to serve their clients from an office.
“Most middle class Kenyans will opt to buy local used vehicles instead of importing a fresh set of wheels. Young parents are opting to keep their vehicles a little longer until the economy improves,” he added. “Money will go toward more important bills like education, health and saving for an unpredictable 2021-2022. This will negatively affect the used car market.”
With roads in the city highly improved, potholes are not the nightmare they use to be. That said without an organised transport system in most of Africa, many living in the suburbs where well-paved roads are as common as fish in the desert, would opt for a crossover to make it through the year without major damage to body panels.
Aside from what the consumer and local dealers feel about the vehicles, they want to buy and sell for profit.
Every market dictates what its consumers get, but, consumers will demand what they need and deserve by making wiser choices and this will shift policy of Government. While SUVs have outnumbered saloon vehicles in the global market, are they the solution to our personal mobility needs.
So what determines the vehicles we take ownership of?
Global vehicle consumption trends will always have a huge influence on choices. Because we are mainly a used-car market it can be very difficult deciding which vehicle to go for next. If you are looking to buy a European vehicle you will most likely find a suitably priced Volkswagen for the simple reason that they sold the third highest number of vehicles in the UK in 2013. The bestselling vehicle brand was Ford leading with their feisty Fiesta followed by Vauxhall which nobody is interested in locally.
Volkswagen sold 194,085 units. Kenyans would also love to know that Audi is the fourth bestselling vehicle in the UK with 140,000 hitting the tarmac in the same year. While the mileage of UK vehicles are significantly higher than those from Japan you may snap up some good well-specked vehicles at decent price. BMW and Mercedes also sell well doing 130,000 and 109,000 respectively. If you want the better prices try going for less famous premium brands like Peugeot, Volvo and Jaguar. They are premium with that tag to attract inflated prices based on badge demand.
According for Frank Jackoyange of Roadrunners Kenya Limited, there has been a significant shift in buying habits and many are requesting for fuel efficient SUVs.
The wide choice of used vehicles fit for purpose will most certainly come from Japan and here you have even bigger volumes to choose from. If you want to guess which vehicle offers the best ownership experience look at how it does in countries it is imported to. What the customer support is like and if the model sales increase after 3- 5 years of ownership. Unhappy motorists switch brand at this crucial lifecycle. If they stay and upgrade to the next version or face lift it means they are quite happy with their experience and feel secure enough to proceed with the brand.
So what will 2020 look like for local motorists. I believe it will be the year of compact crossover Hybrid. Vehicles like the Toyota C-HR, Honda HR-V will find a new breed of conscious motorists downsize.
This new segment will consist mainly of DINKS (Double Income No Kids) for whom space and size mean little because they travel in pairs most of the time and have no children. Not hooked to the notion that big is always better they will be young, trendy and looking for a balance between style and efficiency.
The reason they will be crucial is they have less responsibilities and therefore flash with cash.